Businesses continue to expect to face a variety of obstacles: primarily cost-related obstacles, such as rising inflation and rising costs of inputs, and labour-related obstacles, such as recruiting and retaining skilled employees and labour shortage, according to the latest Statistics Canada Canadian Survey on Business Conditions released on Monday.
The survey, from April to early May, found that the pressures of labour-related obstacles on businesses have risen in the second quarter from the first quarter, while cost-related obstacles have continued to ease in recent quarters. Meanwhile, the outlook of businesses has gradually improved since the fourth quarter of 2023.
Rebrand Cities
“Prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index, rose 4.7% in March and were up 0.8% on a year-over-year basis. Additionally, average hourly wages rose 4.7% in April on a year-over-year basis, following a growth of 5.1% in March. In this context, nearly three-quarters (71.4%) of all businesses expect to face cost-related obstacles over the next three months,” said the federal agency,
“The leading challenge businesses expect to face in the second quarter is rising inflation, expected by over half (54.4%) of all businesses. Businesses operating within accommodation and food services (74.1%); administrative and support, waste management and remediation services (68.4%) and retail trade (64.8%) are the most likely to expect challenges related to rising inflation.
“The second most-expected obstacle is rising costs of inputs (44.6%), which includes labour, capital, energy and raw materials. Businesses in agriculture, forestry, fishing and hunting (71.3%); accommodation and food services (62.5%) and manufacturing (55.5%) are most likely to expect rising cost of inputs to be an obstacle.
“Further, two-fifths (40.6%) of businesses anticipate rising interest rates and debt costs to be an obstacle over the next three months. This obstacle is expected by over three-fifths (61.7%) of businesses in agriculture, forestry, fishing and hunting; by more than half (52.1%) of businesses in accommodation and food services; and by nearly half (48.0%) of businesses in administrative and support, waste management and remediation services.
“When asked to indicate which expected obstacle would be the most challenging, 13.5% of businesses identified rising inflation, 12.1% indicated rising cost of inputs and 9.2% reported recruiting skilled employees. This continues the trend seen in the first quarter, when they were reported at 13.7% (rising inflation), 10.6% (rising cost of inputs) and 10.0% (recruiting skilled employees).”
In the second quarter, more than two-fifths (43.2%) of businesses expect to face labour-related obstacles over the next three months, an increase from 39.4% of businesses in the first quarter. Recruiting skilled employees (31.3%) is once again the most anticipated labour-related obstacle for all businesses, and it is most likely to be expected by businesses in accommodation and food services (42.8%); construction (37.7%) and administrative and support, waste management and remediation services (37.3%), added StatsCan.
“Labour shortage is an expected obstacle for just under one-quarter (24.9%) of all businesses. Businesses in accommodation and food services (41.2%); construction (37.8%) and administrative support, waste management and remediation services (34.4%) are most likely to expect labour shortage to be an obstacle. Just over one-fifth (21.9%) of all businesses anticipate retaining skilled employees to be an obstacle over the next three months. This is led by businesses in construction (28.2%), accommodation and food services (27.6%) and health care and social assistance (27.6%),” it said.
“In the second quarter, close to three-quarters (72.1%) of businesses are very optimistic or somewhat optimistic about their future outlook over the next 12 months. This continues a trend of a gradual increase in optimism when compared with 68.4% of businesses in the first quarter and 65.9% of businesses in the fourth quarter of 2023.
“Over the next three months, 20.7% of businesses expect their sales of goods and services to increase in the second quarter of 2024. This is led by businesses operating in administrative and support, waste management and remediation services (32.9%); accommodation and food services (30.6%) and construction (25.5%). Additionally, nearly one-quarter (24.3%) of businesses expect to raise the prices of their offered goods and services.”
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 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. He was also named by RETHINK to its global list of Top Retail Experts 2024.
About Us
Canada’s Podcast is the number one podcast in Canada for entrepreneurs and business owners. Established in 2016, the podcast network has interviewed over 600 Canadian entrepreneurs from coast-to-coast.
With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience on all our social channels and YouTube – 500,000+ lifetime YouTube views, 200,000 + audio downloads, 35,000 + average monthly social impressions, 10,000 + engaged social followers and 35,000 newsletter subscribers. Canada’s Podcast is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story
