Business Confidence Survey reveals diminishing confidence in Greater Sudbury’s economy
Greater Sudbury, February 21, 2018 – Businesses in Greater Sudbury are citing the rising cost of inputs and access to skilled labour as key sources of concern according to data from the Business Confidence Survey commissioned by the Greater Sudbury Chamber of Commerce and the Ontario Chamber of Commerce (OCC).
These factors have led to an 8 percentage point decline in business confidence in Greater Sudbury’s economy. Of businesses no longer confident in their own economic outlook, more than 80% cited increases in the cost of inputs and more than 50% cited difficulty in attracting and retaining staff.
“The rising cost of doing business and difficulty finding qualified staff are undermining business confidence in Greater Sudbury,” said Michael Macnamara, Chair of the Board, Greater Sudbury Chamber of Commerce. “If businesses can’t afford to keep the lights on, or they can’t find qualified staff, it becomes extremely difficult to grow or even maintain the status quo. We’re working with the OCC to draw attention to these challenges and to try to develop solutions. We know that with the right policy choices, we can create a community where business continues to thrive.”
The chamber noted that managing these factors properly will not only mitigate concerns, but grow business confidence. 30% of respondents said that electricity rate reductions from the Fair Hydro Plan benefited their business, and 32% of confident respondents attributed it to successfully hiring new staff.
The Business Confidence Survey was conducted across Ontario by Fresh Intelligence. The data from the survey is included in the OCC’s Ontario Economic Report (OER) along with the Business Prosperity Index developed by the Canadian Centre for Economic Analysis and a 2018 Economic Outlook prepared by BMO Financial Group.
“Industry in Ontario are feeling the impact of the rising minimum wage, significant labour reforms, increasing global and US competition, NAFTA renegotiations, consistent overregulation, rising input costs, and challenges to accessing talent,” said Rocco Rossi, President and CEO at the Ontario Chamber of Commerce. “This year’s Ontario Economic Report indicates that these challenges are creating a climate of low business confidence that will compromise the province’s future prosperity.”
According to OER findings, 68 percent of firms say the minimum wage increase is predicted to have a negative impact on their business. Compared to last year, they are more likely to project a decline in revenue and a shrinking of their workforce.
Some of the 2018 OER highlights on the outlook of Ontario’s economy include:
- Businesses are losing confidence in Ontario’s economy. In 2012, 47 percent of businesses reported they were confident in Ontario’s economic outlook. Today, that share has been halved, as only 23 percent of businesses are confident in the economy.
- Nearly two-thirds of businesses cite input costs for their lack of confidence, such as the price of electricity, taxes, and the increase in minimum wage. This is compared to only 31 percent who name competitive barriers such as declining consumer demand or changing client behaviour.
- One quarter of small businesses in Ontario project declining revenue in 2018, which is twice the rate of large firms (26 percent vs. 13 percent). Given that the majority of businesses in this province are small, this will likely have a net-negative impact on economic growth.
- The production of goods and services represents a shrinking contributor to business prosperity. Production activities represent only 15.3 percent of business prosperity, meaning that prosperity is increasingly becoming more dependent upon financial activities instead of productive activities. This is indicative of Ontario possessing a higher-risk operating environment.
- Our historically low unemployment rate is a red herring, as more individuals remove themselves from the workforce or simply give up the search. The percentage of Ontarians not participating in the labour force is at a recent high of 35 percent, contributing to employers’ on-going struggle to attract talent.
In addition to new economic research, the OER outlines the areas of focus for the OCC’s policy and advocacy work in the year ahead. In 2018, the OCC will be looking at the potential of the health and life sciences sector, examining challenges related to urbanization and housing affordability, and studying the critical transportation needs across the province. As businesses continue to cite access to talent as a top challenge, the OCC will continue to provide proactive recommendations and solutions to ensure we are leveraging our greatest asset—human capital.
Read the full report here. For more information about the OER, visit: www.occ.ca/ontario-economic-report
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The Greater Sudbury Chamber of Commerce represents 850 businesses employing in excess of 43,000 employees and works as the voice of the business community to influence municipal, provincial and federal legislation affecting the business community.
The Ontario Chamber of Commerce is Ontario’s Business Advocate.
For more information, please contact:
Bryan Heystee
Policy and Communications Manager
Greater Sudbury Chamber of Commerce
705-673-7133 ext. 224
705-677-5735 (cell)
bryan(at)sudburychamber.ca