On December 14, the Canadian Chamber of Commerce released their 2022 Q4 Canadian Survey of Business Conditions that provides data on business conditions in Canada, as well as business expectations and views on emerging issues. The Toronto Region Board of Trade’s Economic Blueprint Institute analyzed data for the Toronto Census Metropolitan Area (CMA) and pulled out findings that reflect the current mood of Toronto region businesses.
With uncertainty around a possible recession in the new year, it’s not surprising that more than half of businesses and organizations in the Toronto region indicated that rising inflation and the rising cost of inputs as their biggest business concerns. In fact, in the next three months, 57.6 per cent of Toronto businesses are likely (very likely or somewhat likely) to pass on increased costs of doing business to customers.
Inflation, coupled with an increasingly tight labour market, also has a medium to large impact when setting wages and salaries, and it’s making it difficult for businesses to adopt technologies that are essential for remaining competitive – 68 per cent do not plan on incorporating new technologies over the next 12 months. For those companies that will, the top technologies are cloud computing (17.8 per cent), security software tools (17.1 per cent), and collaboration tools (15.7 per cent).
The good news is that, despite the rising costs of debt and resources, and the spectre of a recession, 69.8 per cent of Toronto businesses remain optimistic about their future growth over the next 12 months.
As for how the post-lockdown return to work is going, it’s a mixed bag, with 53.2 per cent anticipating working onsite, 9.6 per cent fully remote, and 37.2 per cent in a hybrid environment over the next three months.
After analyzing the data, the Toronto Region Board of Trade is recommending that businesses look to invest in increasing productivity as a key tool in their fight against inflation.
In the 2021 Picking Up Speed report by the Brookfield Institute and co-authored by the Board, it was recommended that Canada should invest in better understanding the economic impacts of digital maturity, while also providing support that helps SMEs navigate their digital transformation. The importance of digital maturity is reflected in the federal budget’s $4 billion commitment towards the Canada Digital Adoption Program, which provides grants and access to expert advice to increase online sales, reduce costs, better manage inventory and more.
Despite many SMEs successfully digitizing their operations to survive the COVID-19 pandemic and early lockdowns, they still significantly lag behind larger firms in foundational technologies. Digitally mature SMEs are more resilient to market disruptions and are 62% more likely to have high sales growth and 52% more likely to have greater profits. (Source)
Read the full Canadian Survey on Business Conditions Report, Q4 2022.