Businesses Expect Profitability To Drop

Over 27 per cent of all businesses expect their profitability to decrease over the next three months while 13.7 per cent of businesses expect their profit to increase, says Statistics Canada. Over half (53.9 per cent) of businesses report they could continue operating at their current level of revenue and expenditures for 12 months or more before considering closure or bankruptcy. In addition, 49.4 per cent say they could continue to operate the same for 12 months or more before considering laying off staff with 17.7 per cent saying they could continue for less than 12 months before laying off staff. Conversely, 20.9 per cent of businesses in retail trade and 19.3 per cent of businesses in wholesale trade expect profitability to increase with over 12 per cent planning to expand, restructure, acquire, or invest in other businesses in the next year. Businesses also expect to face a variety of obstacles (38.5 per cent) including labour, capital, energy, and issues in raw materials. The rising cost of inputs was expected to be an obstacle for manufacturers (65.4 per cent), accommodation and food services (59.6 per cent), and agriculture, forestry, fishing, and hunting (58 per cent). Exclusively in the construction and manufacturing subsector, half of businesses in construction and over two-fifths of manufacturers expect to have difficulty acquiring inputs, products, or supplies domestically over the next three months.