As we settle into the winter of 2026, the economic landscape in Saint John and across New Brunswick is showing signs of caution. For a city driven by industry, energy, and trade, the latest signals from the national economy suggest a year of holding steady rather than rapid expansion.

The Bank of Canada has released its Business Outlook Survey for the Fourth Quarter of 2025, and the results paint a picture of a business community that is keeping a tight grip on the reins. While sentiment has improved slightly from the lows seen earlier in 2025, the overall mood remains subdued as companies navigate trade uncertainties and softer demand.

Trade Tensions Weigh on Sales

For a port city like Saint John, trade is the lifeblood of the economy. The survey highlights that sales growth has been weak over the past year, largely driven by the ripple effects of trade tensions, particularly with the United States. While businesses expect a slight improvement moving forward, export sales growth is predicted to remain modest.

Interestingly, the survey notes that while most exporting firms are compliant with the Canada-United States-Mexico Agreement (CUSMA), the uncertainty alone is causing US clients to hesitate. In response, a small but growing number of Canadian exporters are looking beyond the US border, diversifying into non-US markets to mitigate risk.

Employment Outlook: Hiring Freezes and Potential Cuts

Perhaps the most significant update for local workers is the shift in employment intentions. With demand expected to remain soft, the urgency to hire has evaporated. The survey reports that most businesses plan to either maintain their current staffing levels or decrease them.

More concerning is the data regarding staff reductions. The share of firms planning outright layoffs has risen to its highest level since 2016. For Saint John residents, this suggests a competitive job market in the coming months, with stability being the priority over new opportunities.

Energy Sector Spotlight: Impact on Saint John

Given Saint John’s status as an energy hub, the survey’s special consultation with the oil and gas sector is particularly relevant. The outlook for 2026 is heavily influenced by low oil prices, with West Texas Intermediate (WTI) expected to hover around US$60 per barrel due to global oversupply.

Key takeaways for the energy sector include:

• Investment Cuts: Capital expenditures in the sector are expected to decline in 2026 as firms focus on efficiency rather than expansion.
• Maintenance Focus: Investment isn’t stopping, but it is shifting toward routine maintenance rather than new large-scale projects.
• Production Resilience: Despite lower investment, production levels are expected to rise, supported by efficiency gains and the Trans Mountain Expansion pipeline capacity.

Inflation and Pricing

On the consumer front, there is a silver lining. Firms reported fewer pressures from tariff-related costs compared to the previous quarter. Consequently, most businesses do not anticipate substantial increases in selling prices. Inflation expectations among businesses have stabilized, hovering between 2.5% and 3%.

For the full details and data breakdowns, you can read the official release on the Bank of Canada website.

Frequently Asked Questions

Q: Is a recession expected in 2026?
While the mood is cautious, the fear of a recession has actually decreased. The share of firms planning for a recession has dropped from 33% to 22%, though growth is expected to be slow.

Q: Will prices go up significantly this year?
Most firms do not anticipate substantial hikes in selling prices. Inflation expectations are stable, and cost pressures from tariffs appear to be easing slightly.

Q: How does this affect jobs in Saint John?
The outlook is challenging. Most firms are not looking to expand their workforce, and the number of companies planning staff reductions is at a multi-year high. Job security will likely be a key theme for 2026.

Q: Why is the energy sector cutting investment?
Low global oil prices are the primary driver. Energy companies are prioritizing cost structures and routine maintenance over new capital projects to maintain profitability in a lower-price environment.