Firms expect slower sales growth
For the fifth consecutive quarter, businesses expect their sales growth to slow (Chart 4, blue bars). For many firms, this expectation follows a period of significant sales increases over the past year. Expectations of moderating sales growth are broad-based across regions, firm sizes and most sectors. Indicators of future sales (e.g., sales inquiries and order books) have improved only narrowly compared with 12 months ago, pointing to subdued demand growth ahead (Chart 4, red line).
Several businesses, especially those affected by housing market activity, continue to expect increased interest rates to have a direct negative impact on demand. Firms anticipating slower sales growth also refer to:
- recession worries
- the impact of high inflation on consumers’ disposable income
Despite these signs of softening, most businesses—more than in the…
