2025 Q2 Business Conditions Report

2025 Q2 Business Conditions Report

The Canadian Chamber of Commerce’s Business Data Lab has released their 2025 Q2 Business Conditions Report detailing business sentiment and economic data over the last quarter. 

Unfortunately, this report marks the fourth straight quarter that overall business sentiment has dropped. This trend continues mostly in trade-exposed industries due to the ongoing trade war. 

While the leaders gathered at the G7 meeting, any proposed resolution to the dispute will still take some time before confidence returns to normal levels. 

In better news for our city, London’s Business Expectations Index increased to 95 up from the first quarter of 2025 when the metric was at 87. However, this is still below the baseline of 100 meaning that business sentiment is still deteriorating, just not as quickly as before. 

Inflation remains the top concern for businesses and has bounced back up 3% since Q1 and now represents 49% of businesses top concern for the next three months. When looking at the components that make up the Business Expectations Index, Sales, Employment, and Investment all remain steady around the 100 point baseline but Profitability continues to fall to 76; a drop of 6 points from Q1 of 2025. 

The obstacle for businesses that saw the largest increase between quarters was fluctuation in demand which is up 4%. The largest decrease is costs in leasing or property tax which has decreased 3% nationally. Looking specifically at goods exporters in Canada, between Q1 and Q2 of 2025, 32% more exporters have had supply chain disruptions with no improvement at all happening in Q2. 

The GDP growth for Q1 of 2025 has come in at 2.2% but the projection for the whole of 2025 has come down to 1.2% from the previous forecast of 1.7%. The forecast for Q2 of 2025 is currently at -1% GDP growth which is expected to steadily increase across the year.