How confident are you in your business's future amid today's market uncertainties?

Summary of the original article at the bottom of this page.

Business sentiment is low in Canada?

Of course it is.

When you don't have visibility on your economic outlook, or even a roadmap that could potentially lead your business to success, it's hard to remain positive.

Inflation and rising interest rates make this exponentially worse for Canadians.

But there is a pattern emerging in Canada that is hard to ignore.

We have a large swathe of businesses with negative sentiments on the future.

We have a large swathe of business that have ignored technology investment for the last generation.

We have some of the lowest paid tech workers compared to our U.S. counterparts to the south.

We have the lowest productivity per capita of any developed nation, even though our population continues to explode.

Can you see the pattern?

I can pose it a different way in hopes of being more clear.

Smart businesses understand the value of technology, and subsequent value of tech skills.

Technological investment leads to operational efficiency for businesses.

Businesses that remain lean and efficient, tend to have higher resilience over time.

Highly resilient businesses generally have positive outlooks, or roadmaps for growth.

Roadmaps for growth, lead to more hiring, and general stimulation of economies overall.

Canadians need to drop old ways of thinking and quite literally transform our way of looking at things.

Because we are sitting at the precipice of a devolving workforce.

Who knows what that leads to?

Can you go back to a developing nation, after you've been considered as 'developed'?

A devolving nation, perhaps?

More people who can't afford things because they aren't' being hired, or paid what they are worth.

All within a petri dish of dwindling affordable housing.

That sounds like a recipe for disaster.

So if you aren't growing your digital wings, just know that you will be free-falling into the past.

Connect with our team to make sure your business is taking flight through the turbulence our economy will be facing over the next few years.

Until next time.

Alex, Peak Demand

[email protected]

TEXT +1 (647) 691-0082 to chat with our AI assistant 'PeakBot'.

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Email to [email protected] chat with our AI assistant 'PeakBot'.

A summary of the article is included below.

Original Article: Canadian business sentiment hits decade low amid inflation concerns

Link to Investing Post: https://www.investing.com/news/economy/canadian-business-sentiment-hits-decade-low-amid-inflation-concerns-93CH-3199993

Summary: Canadian businesses are facing significant headwinds with sentiment plunging to its lowest since the Covid-19 recession, as per surveys from the Bank of Canada. The business outlook indicator marked its seventh consecutive quarterly drop. A combination of factors including slowing sales, weaker forecasts, and curtailed hiring and capital expenditure plans are responsible for this negative trend. Inflation concerns dominate, with firms planning to increase prices and consumers expecting higher rates. Despite the gloomy scenario, wage growth expectations are rising, possibly due to less perceived labor shortages. The Bank of Canada maintains a steady 5% interest rate, but many businesses are skeptical about achieving the 2% inflation target within three years. Recent data points to a 4% annual inflation rate and many companies predict prolonged inflation and are bracing for a potential recession.

Key Takeaways

• The Productivity-Technology Link: The article underscores Canada’s lag in economic productivity, which is closely intertwined with technological adoption. A higher productivity often corresponds to better utilization of modern technology, automation, and innovation.

• Volkswagen's Big Move: Volkswagen is partnering with Canada to build a giga-factory in St. Thomas, Ontario for automotive batteries. While it promises up to 3,000 jobs and a revitalization of the automotive sector, the whopping $13-billion government investment has raised eyebrows. Could the amount have not only covered the capital expenses but also the operational costs for several years?

• The Subsidy Dilemma: The massive subsidies extended to corporations like Volkswagen suggest a potential lack of other appealing factors that Canada offers for foreign investment. Is Canada relying too heavily on financial incentives?

• A Deep Dive into Productivity: Economic productivity gauges the efficiency of output production per input unit (like labor and raw materials). While Canada is a top country to live in, it disappointingly doesn’t rank in the top 10 for productivity among OECD nations. Currently, Canada stands at 18th place with its GDP per hour worked being just 42.5% of the top-performer, Ireland.

• The U.S.-Canada Productivity Gap: Between 2000 and 2022, Canada's productivity has slipped 9% compared to the United States. In fact, as of now, Canada’s productivity is only about 72% of its southern neighbor.

• Root Causes of the Decline: The productivity issue is not new and predates the pandemic. Part of the problem? A higher percentage of small businesses in Canada. Larger companies, as data suggests, are more likely to invest in productivity-enhancing tech and training. Plus, many of Canada's biggest players, like those in banking and telecom, are comfortably ensconced in stable oligopolies, meaning they might feel less push to innovate or be more competitive.

• The Real-World Impacts: Productivity isn’t just a metric. Low productivity affects growth, raises operational costs, and can deter potential foreign investors. For instance, the article hints that firms might avoid investing in Canada due to the country's lagging tech adoption, unless there are significant subsidies.

• The Tech Gap's Global Implications: With countries like the U.S. pushing forward with tech-driven productivity measures (as evidenced by Biden's Inflation Reduction Act with its $500 billion commitment), Canada’s technological stagnation might have broader implications in its global competitiveness.

• A Call to Action: There’s a pressing need for both the private sector and the government to step up. Some starting solutions? Easier access to funding and tax incentives for tech investments, a bolstered focus on technical trades education, faster visa processing for skilled foreign workers, and expansive investments in infrastructure and healthcare. The aim should be to improve the way Canada works, and that requires a joint effort from all.