We are in the midst of a period of economic growth as we head into the fall. It’s good news for most
businesses and industry
sectors. We’re not in the clear by any means, but an upward trend is a good sign for what is a critical time of year for many businesses.
The Canadian Chamber of Commerce and Deloitte Canada took a deep dive into Statistics Canada’s third
quarter Canadian Survey on Business Conditions, coming back with some key
Over the next three months, 82% of business expect sales to increase or stay about the same. Optimism that things will increase or stay the same over the next three months hits 85% for demand for products and services, 91% for selling price of goods and services, and 93% for the number of employees. All of these figures have increased quarterly throughout the year. Expectations are up that operating income and
profitability will rise this fall with operating expenses declining slightly.
However, uncertainty is on the rise in terms of viability, with 39% of businesses unsure how long they can continue to operate at current revenue and expenses before they have to consider closing.
With demand and sales expected to increase, businesses have shifted their concerns toward
supply-related obstacles. This includes rising product costs and the ability to hire/retain skilled employees.
Rising sales also increases cashflow and confidence,
allowing businesses to be able to take on more debt. Confidence that a business could take on more debt jumped from 23% to 55% between the second and third quarters of this year.
Additional debt capacity helps businesses invest in their facilities, workforce, inventory and production capacity to help them grow and thrive. It’s also a sign of recovery if fewer businesses are at the limit of what they can borrow.
There has been a lot of talk about workforce challenges over the last few months. One route that businesses are taking to address this is through third-party platforms, often called ‘gig’ workers, freelancers, and contractors. The services businesses use third-parties for changes depending on the sector, but the leading services are website or software development, professional services like accounting or law, and graphic design/audio-visual production.
Another popular workforce subject is teleworking with employees working from home. Businesses in urban areas are more than twice as likely to be planning to shrink physical office locations with 15% anticipating doing so. That number goes up in more dense urban areas like
Toronto, where 24% of
businesses are looking to reduce their office space by having staff work remotely.
For those looking to recall their workforce back from the home office, the Canadian Chamber of Commerce
partnered with Abacus Data back in March to survey employed adults. They found just under half of those
surveyed would be comfortable returning to the workplace for most of their work. Within that, the survey showed women are less comfortable returning to in-person work and people 30 to 59 had more reservations than their younger or older colleagues. The survey identified interacting with customers/clients and use of public transit to commute as the biggest safety concerns. Top actions an employer can take to make their workers more comfortable with working in person include daily cleaning of the
workplace, strict distancing rules, and having everyone where masks.
We’re still a long way from being back to “normal,” or whatever that is going to mean down the road, but it’s encouraging to see more optimism in the business community. For some, this amounts to a shift in stress points from inability to serve their customers due to health restrictions to inability to meet demand due to supply limitations. There are still many challenges to overcome. But we’re moving forward.