Business confidence in Ontario’s economy seemed to bottom out during the pandemic.
Now the Ontario Chamber of Commerce says we’ve reached a “new low” in its seventh annual Ontario Economic Report.
But hey, business folks are always optimistic about the future, especially those in northeastern Ontario who are bucking the trend in the midst of an “uncharacteristically high growth rate.”
Across the board, the report shows business confidence in the outlook of Ontario’s economy in 2023 dipped to 16 per cent, down from 29 per cent last year.
Surprisingly, respondents in northeastern Ontario expressed the highest degree of confidence in what lies ahead at 38 per cent, tied with folks with Stratford-Bruce Peninsula and just behind people in the London area at 43 per cent. Those surveyed in northwestern Ontario cumulatively registered at 34 per cent.
The survey of businesses and organizations forming the report’s foundation took place between last Oct. 18 to Nov. 22, and elicited 1,912 responses from across Ontario.
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The report contain regional and sector-specific data on business confidence, public policy priorities, regional forecasts, and issues such as employee health and well-being, climate change, succession planning, diversity and inclusion, reconciliation, and remote work.
Inflation and the chronic shortage of labour were identified as primary concerns for organizations. The lack of workers directly impact most employers and 87 per cent of large businesses. Shortages are acute in education, construction, and accommodation and food service fields.
Somehow, 53 per cent of businesses polled remain optimistic about the immediate future and the growth prospects of their own organizations, as high employment rates and population growth should prevent a steep decline in consumer spending.
On what needs to be done, small businesses surveyed want governments to prioritize policies and programs that address their immediate financial and operational challenges. Bigger operators stress workforce development and health care issues.
In analyzing Ontario’s economy by region, northeastern Ontario experienced a high rate of employment growth in 2022 at 4.9 per cent, besting the Ontario Chamber's 2022 forecast of 2 per cent. The region’s “incredible job growth” in 2022 is what’s fuelling the optimism.
The YMCA Northeastern Ontario Employment and Immigration Services reported between 50 to 80 new job postings every week – “an amount that was historically unheard of.”
“Labour shortages, inflation, health care system vulnerabilities, and forecasts of an economic contraction are dampening confidence in the province’s economic outlook,” said Rocco Rossi, the Ontario Chamber’s president-CEO, in a news release.
“Promisingly, most businesses feel confident they can withstand these headwinds and continue to grow in the year ahead.”
Senior Policy Manager Claudia Dessanti said the report spells out that leaders in the public and private sectors should invest “strategically in productivity, resilience, and long-term growth,”
“Unsurprisingly, labour shortages continue to dominate as a source of concern directly impacting most employers and 87 percent of large businesses. Shortages are especially acute in specific sectors such as education, construction, and accommodation and food services.”