The Omicron variant of COVID-19 tied together with supply chain challenges has Canada’s business leaders far less hopeful about the next 12 months.
Only 43 per cent of respondents surveyed by the Canadian Professional Accountants of Canada in the fourth quarter of 2020 were optimistic going forward — down from 52 per cent in the third quarter.
The CPA Canada Business Monitor found a good size of movement was in the number who are cautiously neutral — that area grew 10 points to 38 per cent. But the biggest jump came from those who are either extremely or very concerned about the effect of COVID-19 on the economy — to 37 per cent in the last quarter of 2021 compared to 21 per cent in the third quarter.
Supply chain issues are at the top of the list of concerns for business leaders with 20 per cent saying so. It was followed by negative effects of COVID-19 (18 per cent), inflation’s rise (15 per cent), employee recruitment, retention and development (15 per cent) and a lack of skilled workers (8 per cent).
What will help? Nearly half (49 per cent) of respondents said they want the federal government to increase immigration levels for people in job categories that are in demand. They also want to see better support training for workers (47 per cent).
“For almost two years now, the pandemic and its economic fallout have put Canadians and our economy on an unprecedented and challenging course,” said Charles-Antoine St-Jean, president and CEO of CPA Canada. “Business ingenuity and major contributions from governments have helped us weather the storm but, with the spread of Omicron, the private and public sectors must continue to work together to manage the evolving situation.”
Furthermore, small businesses specifically saw their confidence tumble in January. The Canadian Federation of Independent Business (CFIB) Business Barometer revealed that its 12-month index fell to 54.3 points. The three-month index sits at 36.9.
Retail businesses are least optimistic. With a nine-point drop, their confidence sits at just 30.4 points.
“Small businesses have been experiencing supply chain challenges, from a shortage of products to increasing input costs, since the middle of 2021, but the issue is now gaining momentum,” observed Andreea Bourgeois, director of economics at CFIB. “This only adds to the uncertainty many small businesses are facing.”