CORY REDEKOP
Data For Business’ is an effort of the Langley Chamber, in partnership with the Canadian Chamber, to bring our members reports, stats and analysis on economic and business data to help inform business and investment decisions. Read our latest update below:
LANGLEY – In its most recent survey of nearly 16,000 Canadian businesses, the Canadian Survey on Business Conditions shows economic and financial pressures weighing negatively on businesses and business sentiment, with business optimism in BC the second lowest in the country.
As economic growth contracted in Q3 of 2023, with GDP declining 1.1%, business now expect sales and hiring to be slightly negative over the next quarter – the first time those two measures have been negative all year in this survey.
Sales Expectations:
Sectors sensitive to higher interest rates or reductions in consumer spending are more pessimistic towards sales outlooks for the next 3 months, with Transportation/Warehousing, Real Estate, Construction, Accommodation/Food Service, and Administrative Service sectors most likely to expect a decrease in sales.
Employment Expectations:
Similarly, Real Estate, Construction, Accommodation/Food Service, and Administrative Services also are among the most likely to expect employment to decrease in their business over the next 3 months.
Outlook by Sector:
Overall, manufacturing, entertainment and health care are the sectors most optimistic in the country, with more than ¾ businesses in those sectors reporting optimism for the next 12 months. The least optimistic are again Real Estate, Accommodation/Food Service, and Transportation/Warehousing.
Business Obstacles:
Cost pressures continue to be the top concerns of businesses, with inflation, input costs, and debt/interest costs topping the list of concerns. Labour challenges are easing, and supply chain concerns are at their lowest level in years, but concerns around consumer demand are beginning to climb.
Prices:
24% of businesses expect to raise their prices in the next 3 months, which is elevated but lower than the numbers in the previous surveys going back two years. Accommodation/Food Service is most likely to raise prices next quarter, followed by the Wholesale Trade, Construction, Manufacturing and Professional Services sectors.
Debt:
The ability for businesses to take on more debt has been steady all year, with ¼ businesses unable to accept greater debt. This constraint is markedly higher for micro (1-4 employees) and small (5-19 employees) businesses than other sizes, again showing the challenges facing our small business community, particularly in regards to CEBA repayment.
Labour and Wage Growth:
While labour challenges are easing somewhat, they remain most acute in Accommodation/Food Service, Health Care, Manufacturing, Retail, and Construction. The vast majority of businesses expect wages to grow at a similar rate (47%) or slower rate (21%) than they have over the past year.
“The outlook for Canadian businesses deteriorated further in the fourth quarter of 2023, according to Statistics Canada’s latest Canadian Survey on Business Conditions (CSBC). Business pessimism has reached its highest point in two years. Sales and hiring are expected to turn negative to start the new year, while cost-related challenges remain the top obstacles for businesses. With consumer confidence is at its lowest level outside the pandemic, our latest Local Spending Tracker data show that real consumer spending growth continues to be negative on an annual basis. The latest CSBC further illustrates that businesses are also feeling the impact of higher rates – specifically by raising their borrowing costs and reducing their sales.,” said Patrick Gill, Senior Director, Operations & Partnerships, Business Data Lab, Canadian Chamber of Commerce.
Cory Redekop is Chief Executive Director of the Langley Chamber of Commerce
