Business, both big and small, has been through the wringer over the last two years. It has been a saga involving improvising, adapting, pivoting and doing it all over again. And again. I’m optimistic that the worst of the pandemic is behind us. At this point, it has to be, right? 2022 is going to be challenging, regardless of the pandemic. Planning for those challenges is going to be key. The Business Development Bank of Canada recently published an article titled “What to watch in 2022” that lays out what to expect in the coming year: • Pandemic uncertainty • Supply chain pressure • Inflation • Rising interest • Labour problems Despite optimism, we really can’t predict all the zigs and zags of dealing with a long-term global pandemic. Back in late October the Government of Ontario rolled out its plan to ease back public health restrictions and return to “normal” by March. While optimistic, it didn’t seem like a stretch at the time. All this to say that business should continue to move forward planning for possible steps backward along the way. The current wave of infections isn’t expected to be the last, due in part to vaccine distribution inequality. Supply chain issues are certainly not new and neither is news that they aren’t going away. While pressure could ease later in the year, it could take years to clear up. As our recovery picks up, demand for product has increased. Manufacturing is increasing to meet demand, but it’s struggling with supply bottlenecks. Other products are piling up in warehouses unable to be shipped to their destinations. BDC notes that China’s zero-tolerance policy for outbreaks will lead to further closures of factories and ports. Prices of goods, especially energy, fell at the start of the pandemic. This drop followed by a rapid hike at the end of last year caused a spike in inflation. Supply chain bottlenecks will further increase costs of some products. That spike of 4.7% isn’t expected to last, but BDC expects inflation to continue at over 3%, especially in the first half of the year. Uncomfortably high inflation is likely to lead to rising interest rates. The Bank of Canada is expected to gradually hike rates soon as one of the tools to cool inflation. BDC notes one of the consequences of planning rate hikes is that it could heat up the real estate market further in the short term as people try to get ahead of the increases. Labour challenges have been increasing and BDC is warning that they aren’t going to go away on their own. COVID both hastened retirements from baby boomers while stunting immigration — our main source of population growth. We’re continuing to hover around 1 million vacant jobs despite having returned to pre-pandemic workforce participation. This will continue to restrict investment and services, slowing growth through 2022. Dealing with the challenges of 2022 is going to involve intentional investments. Investments in sourcing as local as possible to minimize supply chain issues. Investments in retaining a loyal workforce and labour-saving technology. Investments in energy-saving practices and equipment. Most importantly, investments in our businesses not as a stopgap, but moving them toward where we want to be five to 10 years from now. There will be more zigs and zags ahead, but we are moving ahead.
The Peterborough Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community.