A survey by the Bank of Canada revealed today, Monday, that businesses and consumers expect slow economic growth in the coming year.

Businesses reported below-average sales growth over the past 12 months, and overall, do not expect the pace to pick up in the future.

Companies reliant on discretionary consumer spending saw the largest drop in sales in the last quarter, with one-third of these companies expecting a decline in the next year, as many consumers have decided to buy cheaper products or look for discounts.

However, the percentage of companies preparing for a recession in the next year also decreased during this quarter, with 20% of companies now expecting a significant economic contraction, compared to just over 27% in the previous quarter.

On the consumer side, 51 percent of those surveyed expect the Canadian economy to decline over the next 12 months, compared to 52 percent in the last quarter.

This uncertainty has led many consumers to reduce their spending. Both consumers and businesses have shifted their focus this quarter to government spending and regulatory tax policies, respectively.

The number of businesses citing taxes and regulations as their biggest concern this quarter also jumped, highlighting routine businesses and excessive regulations slowing their plans and taxes – mostly carbon tax – raising their costs.

The uncertainty surrounding the economy and cost pressures remain among the top concerns.