Businesses Expect To Face Obstacles


Real gross domestic product (GDP) rose 0.4 per cent in August following a 0.1 per cent decline in July, says Statistics Canada. This is attributed to the continued easing of public health restrictions and further reopening across the country increasing demand across many close contact service industries. At the same time, over two-fifths (42.5 per cent) of businesses are expecting the rising cost of inputs ‒ including labour, capital, energy, and raw materials ‒ as the most common expected obstacle over the next three months. The rising cost of inputs was expected to be an obstacle for most businesses in manufacturing (70.6 per cent), agriculture, forestry, fishing and hunting (68.4 per cent), accommodation and food services (66.2 per cent), and wholesale trade (62.5 per cent).  As well, almost one-third (31.9 per cent) of businesses expect the cost of insurance to be an obstacle over the next three months. Businesses facing supply chain issues expect these issues to be a medium- to long-term challenge. In fact, over one-quarter (27.2 per cent) of businesses expect difficulty acquiring inputs, products, or supplies domestically. Of these businesses, over half (51.8 per cent) expect these challenges to continue for six months or more, while over one-third (34.2 per cent) are uncertain how long these challenges will persist. Over two-fifths of businesses in construction (45.9 per cent); manufacturing (45.4 per cent); agriculture, forestry, fishing and hunting (43.2 per cent); and retail trade (40.6 per cent) expect difficulty acquiring inputs, products, or supplies domestically over the next three months. Businesses also expect to face obstacles related to the work force, with recruiting skilled employees expected to be an obstacle for over one-third (35.4 per cent). Meanwhile, over half (52.9 per cent) of businesses expect profitability to remain relatively unchanged and, over the next 12 months, 15.1 per cent of businesses foresee major challenges in repaying funding received from repayable government support programs that were put in place because of the COVID-19 pandemic.