As the purchasing power of consumers and businesses decreased along with rising prices, Canadian rural businesses continued to adapt to changing business conditions in the spring of 2022. This analysis of the Canadian Survey on Business Conditions, second quarter of 2022, examines the evolving practices of rural businesses and their expectations for the future.
Rural businesses concerned about the cost of inputs, transportation and insurance
58% of rural businesses expected the rising cost of inputs to be an obstacle over the next three months. This remained the most-frequently cited short-term obstacle for the sixth consecutive quarter. The next three most common short-term obstacles cited by rural businesses were:
- transportation costs 48.2%
- cost of insurance 40.6%
- and, recruiting skilled employees 39.4%.
As part of their response to the concerns related to these costs, 40.6% of rural businesses reported that they expected to raise their prices in the next three months.
Energy expenses expected to increase for rural businesses
59.4% of rural businesses and 40.8% of urban businesses expected that their energy expenditures will increase in the short-term. In response, 55.7% of rural and 57.2% of urban businesses reported planning to increase their prices. Rural businesses were more likely than urban ones to report other plans in response to increased energy expenses.
Supply chain difficulties are expected to continue
65.4% of rural businesses expecting supply chain difficulties in the short-term reported that these challenges had intensified over the previous three months. The most commonly cited factors for this increase were:
- delays in deliveries 81.2%
- increased prices 76.6%
- and, shortages 73.2%.
56.9% of rural businesses anticipating domestic supply chain issues expected them to continue for at least six months, while 51.7% of rural businesses predicting foreign supply chain issues believed that they would continue for at least six months.
Three-in-five rural businesses predicting labour challenges expect that management will have to work longer hours
Among rural businesses anticipating labour-related obstacles in the near future, the expected impacts were:
- management working increased hours 58.5%
- existing staff working more hours 47.9%
- hiring criteria being less selective 38.7%
- and business growth being compromised 38.0%.
Source: Statistics Canada