Rising inflation remains the top obstacle expected in the next quarter for Canadian businesses according to survey of 17K businesses
The Canadian Chamber of Commerce Business Data Lab (BDL) and Statistics Canada have released the Q4 findings of the Canadian Survey on Business Conditions (CSBC). The Winnipeg Chamber of Commerce is collaborating with BDL to bring local and future-focused business insights to major cities across Canada to support economic recovery and growth.
The 2022 Q4 CSBC was collected from October 3 to November 7, 2022. The survey was conducted by Statistics Canada via electronic questionnaire, using a stratified random sample of establishments with employees. The 2022 Q4 CSBC survey is based on responses from 17,363 Canadian employers, including 827 responses from Winnipeg CMA.
“We are continuing to see post-pandemic impacts on business and there is a growing sense of uncertainty,” said Loren Remillard, President and CEO of the Winnipeg Chamber of Commerce.
“Inflation and rising costs are a big concern, and close to 70% of Winnipeg businesses say that recruiting and retaining talent is harder now than it was a year ago. Supply chain issues are still prevalent, with 55% of businesses saying its worse now than it was three months ago. 75% of Winnipeg businesses do not plan to take out any additional debt as the economy cools and rising interest rates bite into consumer spending. It all adds up to an uncertain outlook over the winter.”
Noteworthy Winnipeg-based results from the latest CSBC survey include:
- Businesses have been impacted in several ways by the convergence of inflationary pressures, labour challenges, and supply chain problems. The most significant Winnipeg business obstacles involve rising inflation, rising input costs and labour supply-driven difficulties, including those related to hiring and retaining the workforce. About 61% of businesses in Winnipeg expect rising inflation to be an obstacle in the next three months, up 5% from the last quarter. One-third of the businesses in Winnipeg expect to raise prices over the next quarter, slightly down from the last quarter.
- Businesses in Winnipeg are continuing the pressure of raising the cost of inputs as well as pressures from rising interest rates and debt costs. Over 35% of the businesses in Winnipeg mentioned that they are likely to pass on increased costs to customers.
- The ability of firms in Winnipeg to take on extra debt stayed roughly the same from the previous quarter at around 55%, but it is still limited, especially for smaller businesses and underrepresented groups. Lack of confidence or uncertainty about future sales is the top barrier to firms taking on more debt (35%), followed by cash flow (28%) and unfavourable interest rates (19%).
- About 26% of Winnipeg businesses reported that their industry’s debt levels have grown since before COVID-19, while 14% said they had decreased. The industries with the highest debt levels include construction (48%) real estate (36%) and retail trade (35%).
- 3 in 4 businesses in Winnipeg responded that they did not apply for a new line of credit or loan. High-interest rates and worries about the economy or inflation are listed as the main causes of small enterprises did not submit a loan application.
- Many Winnipeg firms struggle with the competition for talent caused by labour shortages, one out of three firms in Winnipeg anticipates a labour force shortage to be an obstacle. Businesses in the mining and oil, construction and manufacturing, retail and food service, report the most issues with hiring and shortages. Around 70% of Winnipeg’s businesses said that recruiting and retaining talent is harder than it was a year ago.
- Supply chain problems continue to be one of the major obstacles for Winnipeg businesses, with 55% of them believing that the situation has become worse over the past three months and around 32% expecting the supply chain situation to worsen in the next quarter. More organizations want to replace inputs, engage with new suppliers, and work with suppliers to strengthen their supply chains.
- Plans for technology adoption are modest across all industries, particularly for robots, software, and hardware that use AI. The biggest barriers to adopting new technologies, according to businesses in Winnipeg are finding qualified employees, integrating new digital technologies into the organization’s or business’s current IT infrastructure, and getting funding.
- Around 66% of businesses in Winnipeg are optimistic about the future outlook in 2023. Winnipeg firms predict slower growth in sales, employment, and investment as well as decreasing profit margins.