Canadian Survey of Consumer Expectations-First Quarter of 2022

Consumers are more concerned about inflation than they were before the pandemic and believe that controlling inflation has become more difficult for authorities. They think price pressures are broadening. Survey respondents believe the following issues are making inflation harder to control:

• supply chain issues
• the persistence of the pandemic
• high government spending (Chart 2)

Most expect supply chain issues to persist for at least one to two years (Chart 3). In follow-up interviews, some respondents said the invasion of Ukraine may cause supply chains to be rerouted and become more local, leading to higher prices for essentials. For example, one respondent noted that the cost of filling a Honda Civic increased recently from $40 to $70. Respondents also suggested that prices will likely not decline even after supply chain issues are resolved because businesses need to restore their profit margins.