For Immediate Release
December 19, 2022
VANCOUVER, B.C. — Rapidly increasing costs are top of mind for Metro Vancouver businesses, according to new data released by the Greater Vancouver Board of Trade and the Canadian Chamber of Commerce’s Business Data Lab.
The top five obstacles Metro Vancouver businesses are expecting in the first quarter of 2023, as reported in the latest edition of the Canadian Survey on Business Conditions, are rising inflation (55%), the rising cost of inputs (44%), rising interest rates (43%), rising real estate and leasing costs (36%), and recruiting skilled employees (36%).
Nearly half of businesses in Metro Vancouver (48%) expect operating expenses to increase in the next three months, while 47 per cent expect profitability to decrease and 30 per cent expect to raise prices. A full 65 per cent of businesses reported they are very likely (37%) or somewhat likely (28%) to pass on any increase in costs to customers.
“The labour challenges and borrowing costs of the past year are beginning to manifest in a liquidity crunch that will put many of the businesses still carrying significant debt from the pandemic at risk,” said Bridgitte Anderson, President and CEO of The Greater Vancouver Board of Trade. “We need governments laser focused on reducing barriers associated with doing business in our region and creating efficient permitting processes, not increasing costs and fees.”
“Persistent labour shortages and difficulty finding skilled workers will be compounded by a looming wave of retirements to create a truly challenging business environment. It will take a coordinated effort from the business community, education sector and governments to ensure that we have the skilled workforce our region needs to thrive,” Anderson concluded.
Metro Vancouver businesses plan to increase compensation to attract and retain talent, with three quarters (74%) reporting that they will raise wages in the coming year. Concerningly, more than a third (36%) of businesses have no plan in place to address expected retirements. With businesses in every sector experiencing the same challenge, organizational ability to recruit and retain talent will be a key determinant of success in 2023.
Expected obstacles in the next three months
- Rising inflation (55%)
- Rising cost of inputs (44%)
- Rising interest rates and debt costs (43%)
- Rising costs in real estate, leasing or property taxes (36%)
- Recruiting skilled employees (36%)
Anticipated changes in the business environment the next three months
- Operating expense increases (48%)
- Decrease in profitability (47%)
- Decrease in cash reserves (38%)
- Decrease in operating income (32%)
- Raising prices to offset costs (30%)
- More than half of respondents in the accommodation and food services sector (62%) anticipate repaying funding from government support program will be “a major challenge” in the next year
- A significant number of businesses are either very likely (37%) or somewhat likely (28%) to pass cost increases on to customers
- B.C. businesses are more pessimistic (27%) about their future outlook over the next 12 months than businesses in the rest of Canada (18%)
- Technology adoption remains a challenge, particularly for small businesses, with over 70 per cent stating that they do not plan to adopt any technology in the next 12 months
- The top challenge in adopting new technologies was hiring workers with technical skills
About the Canadian Survey on Business Conditions and Report
The Canadian Survey on Business Conditions (CSBC) was created in the spring of 2020 by Statistics Canada in partnership with the Canadian Chamber of Commerce to provide timely, relevant data on business conditions in Canada, as well as business expectations and views on emerging issues. The data is used by governments, chambers of commerce, industry associations and researchers to monitor evolving business conditions and devise policies to support Canadian business. The 2022 Q4 CSBC was collected from October 3 to November 7, 2022. The survey was conducted by Statistics Canada via electronic questionnaire, using a stratified random sample of establishments with employees. The 2022 Q4 CSBC survey results for Metro Vancouver are based on responses from 756 employers.
The Canadian Survey on Business Conditions Report (CSBCR) presents in-depth quarterly analysis of the CSBC conducted by the Canadian Chamber of Commerce’s Business Data Lab. The Business Data Lab collaborates with the Canadian Chamber’s network of boards of trade and chambers of commerce to distribute and amplify CSBC insights to the local level.
About the Greater Vancouver Board of Trade:
Since its inception in 1887, the Greater Vancouver Board of Trade has been recognized as Western Canada's leading business association, engaging our members to inform public policy at all levels of government and empowering them to succeed and prosper in the global economy. With a Membership whose employees comprise one-third of B.C.'s workforce, we are the largest business association between Victoria and Toronto. We leverage this collective strength, facilitating networking opportunities, and providing professional development through unique programs. In addition, we operate one of the largest events platforms in the country, providing a stage for national and international thought leaders to enlighten B.C.'s business leaders.