Businesses in Canada still expect to face a variety of obstacles over the next three months due to inflation and the rising cost of inputs, as well as those related to hiring and retention, according to Statistics Canada’s Survey on Business Conditions. However, pressures faced by businesses continued to ease in the second quarter.

More than half of businesses, 56.0%, expect rising inflation to be their top obstacle over the next three months.

The rising cost of inputs — including labor, capital, energy and raw materials — was the second most commonly expected obstacle, with 40.3% expecting it to be an obstacle. In addition, when asked to indicate which of the expected obstacles would be the most challenging, rising inflation at 16.4% was the most cited by businesses, followed by recruiting skilled employees at 15.0%. Forty-seven percent of businesses expect at least one labor-related obstacle.

The report also found that 22.9% of businesses faced challenges maintaining inventory levels or acquiring inputs, products or supplies, either domestically or abroad. Among the businesses, 14.7% expect the challenges to worsen in the short term.

However, 73.5% of businesses reported being either very optimistic or somewhat optimistic about their outlook over the next 12 months, a slight improvement from 67.5% in the previous quarter.

Additional findings include:

• 15.0% of businesses expect recruiting skilled employees to be an obstacle over the next three months.
• 44.8% expect management to work increased hours and 38.5% of businesses expect existing staff to work increased hoursand
• 40.0% expect labor-related issues to limit business growth. .
• 36.4% of businesses expect to hire less-suitable candidates
• 27.1% expect delays in providing goods or services to customers due to labor shortages.

The survey was conducted from April 3 to May 8.