Decades-high inflation is proving to be the paramount pressure point for Metro Vancouver businesses, according to a new survey.
Nearly two-thirds (64.5 per cent) of businesses in the region say inflation will be an obstacle over the next three months, data released Friday by the Greater Vancouver Board of Trade (GVBOT) reveals.
This puts inflation as the No. 1 concern among respondents, beyond recruitment and retention of employees as well as transportation costs.
When broken down by industry, the construction (84.6 per cent) and agriculture/forestry (85.3 per cent) sectors are most concerned about how surging prices will affect their growth. Meanwhile, the mining, and oil and gas industries are the least fazed with 31.6 per cent of respondents reporting inflation to be an obstacle in the latest quarter.
“We have seen firsthand that small- and medium-sized businesses are disproportionately impacted by inflationary pressures and governments at all levels must find ways to reduce the regulatory and tax burdens that are hampering their ability to get ahead,” Bridgitte Anderson, president and CEO of the GVBOT, said in a statement.
Beyond other rising cost challenges such as growing interest rates and real estate prices, the next most pressing issue facing businesses throughout the region is the ongoing labour crunch.
More than one-third (35.3 per cent) of respondents report worker shortages as being an challenge.
The issue is most felt most sharply in food services/accommodation (61 per cent), while health care and social assistance organizations are least concerned (14.9 per cent).
Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association, told BIV going into the third quarter that his industry was short 30,000 workers throughout the entire province.
“Governments can talk about those skills development [programs], but what we’re up against here, frankly, is a lack of people,” he said.
Overall, 60.2 per cent of businesses report that recruiting and retaining staff is more challenging now than 12 months ago.
Anderson said the pandemic has slowed immigration, increased the need for digital/STEM (science, technology, engineering and mathematics) skills and accelerated long-term demographic shifts in the workforce.
“We have a short-term crisis and a longer-term imperative to act in a big, bold way with all levels of government, industry, and post-secondary institutions together at the table to ensure we have a plan to fill the jobs of today and train for the skills of tomorrow,” she said.
Despite those worries over labour, 28.6 per cent of the construction sector expects to hire workers in the coming months – the largest proportion out of all sectors – followed by transportation and warehousing (26 per cent).
While the vast majority of retailers (76.5 per cent) expect to keep their headcount the same, 9.5 per cent of the sector plans to cut workers. That’s more than any other sector surveyed.
Jackie Ross, principal of Vancouver-based JRoss Recruiters Inc., told BIV in June retail faced a mass exodus of talent because of the pandemic, leading to an “erosion of trust” among long-time workers.
Ross said it’s time for the industry to boost hiring among older workers amid labour shortages.
“They are often locked out of opportunities in our sector because of age discrimination and hiring biases,” she said.
Meanwhile, 31.3 per cent of businesses say they will begin increasing the prices of goods and services they offer compared with the 62.4 per cent that expect to keep those prices the same.
Three-quarters (75.2 per cent) of businesses in food services/accommodation plan to hike prices — more than any other sector covered in the survey.
It also remains unclear to 43.8 per cent of businesses how long supply-chain issues – one of the driving factors behind inflation – will last.
Despite all the challenges ahead, just 2.1 per cent of respondents said they planned to scale down their operations in B.C. over the next 12 months.
The GVBOT worked with the Canadian Chamber of Commerce’s Business Data Lab to cull this data from 748 respondents within the Metro Vancouver region.