Behind the declared optimism of Quebec companies hides a certain gloom and a growing fear for their ability to survive beyond the next 12 months. Right off the bat, 83.4% of Quebec businesses say they are somewhat or very optimistic about the future in store for them over the next 12 months. The less optimistic are concentrated in accommodation and food services, as well as real estate, rental and leasing services.
Once that said, 55.6% of them say they can continue their activities at their current level of income and expenses beyond the coming year before considering closure or bankruptcy. They were 75.9% to make such a statement in the poll conducted in the previous quarter. Also, the proportion of businesses not knowing how long they will be able to continue operating (before considering closure or bankruptcy) is up sharply compared to the previous quarter, to 38.5%, against 16.2% , can we read in the analysis of the expectations of Quebec companies in the third quarter of 2021 published Thursday by the Institut de la statistique du Québec (ISQ). The data used come from the Canadian Business Situation Survey conducted by Statistics Canada. For Quebec, the results are based on responses from 4,654 companies.
Another notable change, 54.6% of companies say they can continue to operate at their current level of income and expenditure beyond the coming year before considering laying off staff. They were 65.9% to make the same declaration in the second quarter preceding. And 30.3% do not know how long they will be able to continue to function. This was the case for 14.4% of respondents in the previous quarter.
In addition, 15.3% of companies claim that they are unable to take on more debt. As you can imagine, this situation is more prevalent in accommodation and food services, as well as in the arts, entertainment and recreation sector. On the other hand, 23.1% of companies do not know if they have the capacity to take on more debt, a situation that is more severe in the sectors of finance and insurance, transport and warehousing, as well as construction.
The obstacles to be overcome remain numerous. Thus, nearly half of them still expect to encounter difficulties in recruiting qualified employees or a labor shortage; one third have difficulty retaining qualified employees.
The same level of anxiety persists regarding supply difficulties: a third of them foresee an increase in the cost of inputs, while a little more than 20% fear difficulties in acquiring inputs, an increase in costs. related to transportation and an increase in other costs, such as insurance.
Concerns about recruiting qualified employees are more common in accommodation and food services, retail trade, construction, administrative, support, waste management and sanitation services, as well as manufacturing. Those associated with the labor shortage are more evident in accommodation and food services, manufacturing and retail trade, where more than six in ten businesses say they are concerned.
Retention of skilled employees is mentioned more clearly by more than four in ten companies in the finance and insurance, accommodation and food services, retail, and manufacturing industries.
Inflationary pressure
For its part, the increase in the cost of inputs is more of an obstacle for more than two-thirds of companies in manufacturing; three-fifths of those in agriculture, forestry, fishing and hunting, as well as accommodation and food services; and half of those in construction, adds the ISQ. The difficulties related to the acquisition of inputs are felt more in construction, manufacturing, as well as agriculture, forestry, fishing and hunting. Firms in the latter two sectors are also more likely to point in the direction of transportation costs.
Finally, the possibility of an increase in the insurance bill is more evident in agriculture, forestry, fishing and hunting, being mentioned by more than half of the companies in the sector, and in administrative services, support, waste management and sanitation, and accommodation and catering services, for a third of them.
As for their ability to pass these additional costs on to their customers, 26.7% plan to increase their selling prices over the next three months, while 66.2% do not anticipate a price change.