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Feb 28, 2023

Business Challenges Remain Despite Improvements

Businesses are still dealing with a number of challenges and expect them to get worse in the short term, says Statistics Canada’s ‘Canadian Survey on Business Conditions’ for the first quarter of 2023. Inflation, labour issues, costs of inputs, and supply chains look like they’re starting to improve, but there is still a way to go. Inflationary pressures have been slowly decelerating since the peak of the Consumer Price Index (CPI) in June 2022 (8.1 per cent), but they still remained higher than recent historical trends after rising 5.9 per cent year over year in January 2023. Also in January, employment rose by 150,000 (+0.8 per cent), while the unemployment rate held steady at five per cent, just above the record low of 4.9 per cent reached in June and July 2022. In the first quarter, more than one in four businesses (26.3 per cent) faced challenges maintaining inventory levels or acquiring inputs, products, or supplies, either domestically or abroad. Additionally, one-fifth (20.3 per cent) expected these challenges to worsen in the short term. More than one-quarter (26.3 per cent) of businesses expect supply chain challenges of some kind over the next three months, down from the previous quarter (29.8 per cent). Businesses in wholesale trade (47.4 per cent) and retail trade (41.2 per cent) are the most likely to expect various supply chain challenges over the next three months.

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