A Statistics Canada analysis of supply chains found that a “vast majority” of Canadian businesses expect the situation to worsen over the next three months.
The Sept. 1, 2022 report titled Analysis on supply chains in Canada, third quarter of 2022 by Stephanie Tam, Shivani Sood and Chris Johnston painted a bleak picture for businesses as they struggle to acquire inventory.
“Similar to the previous quarter, of businesses that expect to experience supply chain challenges, the vast majority also expect supply chain challenges to either worsen or remain about the same over the next three months and businesses plan to use various strategies to address supply chain issues,” wrote analysts.
Businesses are attempting to avoid further disruptions by partnering with new suppliers, substituting products and shifting to local sources.
When it comes to acquiring inputs or supplies, the construction industry has been the hardest hit with over half expecting issues in the next six months.
“Nearly half of businesses in construction (47.8%) and manufacturing (43.9%) expect difficulty acquiring inputs, products or supplies domestically over the next three months,” wrote analysts.
“Of the businesses expecting difficulty acquiring inputs, products or supplies domestically, over half (54.3%) expect these challenges to continue for six months or more, down slightly from the previous quarter (57.3%).”
The poll surveyed businesses across Canada in an online questionnaire from Jul 4. to Aug. 8. 17,013 different businesses and organizations took part in the survey.
“Many businesses have not yet fully recovered from the prior tightening and closing
of borders, restrictions on the movement of people and goods, and lockdowns. As a result, the status of supply chains and the impact they have on their respective economies are of great interest,” the Statistics Canada report reads.
“Widespread global supply constraints in combination with pent-up consumer demand resulted in inflationary pressures.”
Canada’s inflation rate reached 7.6% in July, a slight reduction from the 8.1% rate reported in June. Statistics Canada is expected to report data for August in the coming weeks.
The Bank of Canada has indicated that it will hike interest rates again in the coming days by three-quarters of a percentage point. Additionally, high costs of food and transportation remain an obstacle for many businesses.