Uncertainty and cost pressures remain firms’ most frequently mentioned concerns (Chart 3). The sources of uncertainty noted most often were domestic factors, such as economic growth, costs, interest rates and tax policies. This uncertainty is contributing to businesses’ modest investment plans.
The share of firms citing taxes and regulation as one of their top concerns increased sharply this quarter. Firms mentioned red tape and regulations as slowing their plans, and taxes, predominantly the carbon tax, as increasing their costs.
Meanwhile, capacity pressures—namely labour shortages and supply chain challenges—have continued to decline in importance over the past two years. And for the first time since the start of 2023, demand has become less of a concern.
