Business Losing Confidence in Ontario's EconomyHigh input costs and access to talent are key concerns
Wednesday, February 7, 2018
THUNDER BAY, FEBRUARY 7, 2018 – Today the Thunder Bay Chamber of Commerce, in partnership with the Ontario Chamber of Commerce, released the second annual Ontario Economic Report (OER), a comprehensive analysis of data and emerging trends on the economic health of the province.
The report reveals that 77 percent of Ontario businesses say access to talent remains the largest impact on their competitiveness while nearly half (48 percent) report a lack of confidence in the economic outlook for Ontario. In addition, 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.
“Industry in Ontario are feeling the impact of increasing global and US competition, consistent overregulation, rising input costs, and challenges to accessing talent,” said Rocco Rossi, President and CEO at the Ontario Chamber of Commerce. “This report indicates that these challenges are creating a climate of low business confidence that will compromise the province’s future prosperity.”
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.
· 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.
“This important report identifies key vulnerabilities within our economy and provides the information needed to find solutions to drive our economy forward,” said Charla Robinson, President of the Thunder Bay Chamber. “The Thunder Bay Chamber, in collaboration with the Ontario Chamber Network, will continue to engage and advocate on behalf of our business community to explore these issues and develop the recommendations to address these challenges.”
For more information about the OER, visit: www.occ.ca/ontario-economic-report
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