Canadian businesses optimistic about future outlook

Nearly three-quarters (73.5 per cent) of businesses reported in the second quarter of this year being either very optimistic or somewhat optimistic about their future outlook over the next 12 months, a slight improvement from the previous quarter (67.5 per cent). The businesses most likely to be optimistic about their future outlook were those in finance and insurance (79.1 per cent) and health care and social assistance (77.8 per cent), according to a new report released Monday by Statistics Canada.

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“Real gross domestic product edged up 0.1% in February, following a 0.6 per cent increase in January. Inflationary pressures remained higher compared with recent historical trends, as the Canadian Consumer Price Index (CPI) rose 4.4 per cent year over year in April 2023, which remained lower than the peak in June 2022 (8.1 per cent). Also in April, employment rose by 41,000 (+0.2 per cent), while the unemployment rate held steady at 5.0 per cent, just above the record low of 4.9 per cent reached in June and July 2022,” said the federal agency.

“Businesses continued to expect to face a variety of obstacles over the next three months related to supply chains, rising inflation and rising cost of inputs, as well as those related to hiring and retention. However, pressures faced by businesses continued to ease in the second quarter of 2023.

“Nearly one in four businesses (22.9 per cent) were facing challenges maintaining inventory levels or acquiring inputs, products or supplies, either domestically or abroad. Additionally, 14.7 per cent of businesses expected these challenges to worsen in the short term. Over the next three months, nearly half of businesses expected their operating expenses to increase, nearly three in 10 businesses expected their profitability to decrease, nearly three in 10 expected to increase the prices they charge and four-fifths expected their number of employees to remain the same.”

The report said rising inflation remained the most commonly expected obstacle by businesses over the next three months. Over half of businesses (56.0 per cent) expected this to be an obstacle, led by businesses in accommodation and food services (68.4 per cent); agriculture, forestry, fishing and hunting (65.7 per cent); and retail trade (63.8 per cent).

“Over one-quarter (25.9 per cent) of businesses expected their sales of goods and services offered to increase over the next three months, up from 19.1 per cent in the previous quarter. Around two-fifths of businesses in accommodation and food services (40.8 per cent) and manufacturing (38.3 per cent) expected their sales of goods and services offered to increase over the next three months,” said StatsCan.

“Nearly one-quarter (22.9 per cent) of businesses expected supply chain challenges of some kind over the next three months, down from the previous quarter (26.3 per cent). Businesses in wholesale trade (41.4 per cent) and manufacturing (35.8 per cent) were the most likely to expect various supply chain challenges over the next three months. Among businesses that expected supply chain challenges of some kind over the next three months, nearly three in 10 (29.7 per cent) reported that the challenges they have experienced have worsened over the last three months, down from nearly two-fifths (39.6%) of businesses in the first quarter.”

Mario Toneguzzi

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)