Local Entrepreneurs Confident About Economy, Plan To Invest In Their Businesses
HALIFAX – Canadian entrepreneurs are more confident about investing in their businesses now than they were before the pandemic. And Atlantic Canadian businesses are leading the pack.
In October, BDC surveyed business owners across the country to measure their confidence in the economy and how likely they are to invest in their business.
The results, released in a new report, show 85 percent of Canadian companies expect their spending to be higher or stay the same in the next 12 months.
That’s compared to 81 percent in January 2020 – and a low of 58 percent in April 2020.
Pierre Cléroux, BDC’s vice president of research and chief economist, says the results show entrepreneurs’ confidence in the economy is strong.
“Fear of new lockdowns is fading away, thanks to vaccination, and businesses are optimistic for 2022,” Cléroux says.
No one is more optimistic than Atlantic Canadian business owners.
BDC’s survey found 92 percent of Atlantic Canadian business owners expect to spend as much or more money on their business in 2022.
That’s up 12 percentage points from last year. It’s also much higher than the country as a whole. Across Canada, 84 percent of business owners said they plan to invest in their business next year.
Atlantic Canadian businesses also have more confidence in the economy than almost any others. According to the BDC, their positive outlook stems from two important developments.
The first, and most obvious, is that vaccination campaigns have reduced the risk of new lockdowns and improved stability for businesses.
Atlantic Canadian provinces have among the highest vaccination rates in the country. The region’s handling of the pandemic and restrictions has been, overall, fairly successful.
Along with good Covid-19 management, the region is also seeing a lift from high energy prices.
Those factors contributed to a whopping, 20-percentage-point increase in Atlantic business owners’ confidence in the economy in the past year.
But while Atlantic Canadian businesses are more optimistic than the rest of the country, they are also more susceptible to one of the biggest challenges that will emerge next year.
BDC says hiring difficulties will be one of the biggest challenges businesses face in 2022. Those businesses will be hit with both short- and long-term staffing challenges.
In the short term, many will face barriers recruiting employees lost during the pandemic, especially since many of those employees have changed fields. That will be compounded by the long-term problem of an aging Canadian population and slower immigration.
The situation is expected to be the worst in Atlantic Canada and businesses here are more concerned about hiring than in any other region.
Across the country, 55 percent of businesses are facing hiring difficulties. But in the Atlantic provinces, 63 percent are having trouble hiring.
BDC says for the first time since March, labour shortages are starting to hold back investments for a growing proportion of business leaders.
“While low demand and low cash flow remain greater barriers to investments than labour shortages, the situation is expected to change as labour shortages worsen while cash flow and demand improve,” the report says.
Over half of the business owners surveyed already have difficulties hiring qualified workers. That’s the highest proportion since the organization started its survey in 2019.
BDC says supply chain disruptions will also hamper investment in 2022. However, it believes those effects will only last a short time.
Trevor Nichols is the associate editor of Huddle, based in Halifax. Send him your feedback and story ideas: [email protected].