The Ontario Chamber of Commerce recently provided an update on the economic landscape in its 2023 Ontario Economic Report. This report, now in its seventh year, provides insights into the perspectives and experiences of Ontario businesses, and analyzes current events, data, and economic outlooks.
What does this information mean for your business? Staying on top of market trends and understanding the factors impacting Ontario’s businesses is critical for addressing issues and developing short and long-term business strategies.
What is the Ontario Chamber of Commerce?
The Ontario Chamber of Commerce is a non-profit organization with over 60,000 members. This organization considers itself a “partner of business” and works to advance the interests of Ontario Chamber of Commerce members through policy work, business services, and engagement.
Highlights of the Ontario Chamber of Commerce’s Report
The Ontario Chamber of Commerce’s report provides insights from two areas: the 2023 Business Confidence Survey and more general economic updates. Some highlights from each section are set out below.
2023 Business Confidence Survey
The 2023 Business Confidence Survey relies on survey responses from Ontario’s business community and aims to reflect a broad cross-section of Ontario’s businesses and regions.
This year, the Business Confidence Survey uncovered the following:
- Only 16% of respondents expressed confidence regarding the economic outlook for 2023, down from 29% in 2022. This result demonstrates a record low in business confidence.
- Despite record-low responses regarding business confidence, 53% of businesses are optimistic about their outlook and growth prospects.
- Ontario’s businesses rank inflation and labour shortages as their primary concerns – notably, most employers and 87% of large businesses are experiencing labour shortages.
- Larger businesses want the government to prioritize workforce development and healthcare issues, while smaller businesses want the government to prioritize supporting immediate financial and operational issues.
- Businesses have identified notable gaps in addressing employee health and well-being, diversity and inclusion, economic reconciliation, and climate action.
Highlights of the 2023 Economic Outlook
The 2023 Economic Outlook relies on forecasting data regarding Ontario’s economy. This year, the Economic Outlook noted the following:
- Geopolitical instability (e.g., the Russo-Ukrainian War), labour shortages, and inflation will continue to create economic challenges.
- Due to higher interest rates, shrinking business investments, and consumer spending, Ontario’s GDP is expected to fall by 0.4% in 2023.
- Employment growth is expected to drop by 0.5%.
Despite the above, Ontario saw moderate-to-strong growth in both population and employment in 2022. This growth is expected to continue throughout 2023.
What the 2023 Economic Update Means for Ontarians
While it is clear that Ontario’s businesses are concerned about the impact of market trends and factors impacting the economy, over half of the companies surveyed remained optimistic about their growth potential.
Many of the factors impacting business perceptions and performance are outside the control of business owners. However, some challenges may be opportunities. For example, Ontario’s record-high employment, job vacancies, and labour force participation rates, in addition to the federal government’s launch of the Temporary Foreign Worker Program Workforce Solutions Road Map, have the potential to impact current job vacancies greatly.
2023 Ontario Economic Update: Considerations for Business Owners
Navigating periods of uncertainty can be challenging for any business owner. Perseverance and smart planning can not only help you stay competitive but also bring peace of mind. A few considerations for business owners navigating the current economic outlook are outlined below.
Engage in Short and Long-Term Business Planning
If you are not already thinking about short and long-term business planning, you need to start now. Reviewing your strategy regularly, including your business’s financial health and reserves, growth, marketing, and rates, and adjusting them as needed, will help you determine how your business is being affected by current trends and allow you to adjust your strategies as needed to counteract them.
Evaluate Your Budget
While evaluating and monitoring your business’s budget is a key consideration in any economy, rising inflation rates and interest hikes mean that it is more important than ever for business owners to make a plan. Consider, for example, expenses like office space rentals. If your business is not making the most of its office space because most of your employees are working from home, now might be a good time to downsize. It is also worth considering business loans and credit as there may be opportunities to restructure or refinance that will benefit you in the long run.
Stay on Top of Current Events and Other Developments
Resources like the 2023 Ontario Economic Report provide great insights into the factors affecting businesses today. Beyond that, it is important to maintain a sense of curiosity regarding current events and the market to understand how and why these events are impacting your business.
Understanding Your Workforce
Understanding your workforce, including current and potential employees, is an equally important consideration for Ontario’s business owners.
Over the past few years, the COVID-19 pandemic and rapid adoption of remote and hybrid work environments have impacted employee expectations. Further, Ontario’s labour market has now tilted in employees’ favour, changing long standing employer-employee dynamics. To attract employees, employers may need to change their expectations regarding where their employees work and how they are compensated to attract great candidates.
It is equally important to retain good talent in this climate. Whether it is a salary increase, or providing flexible working arrangements, it is worth considering what steps your business should take to keep current employees happy.
Supporting Your Customers
A pessimistic economic outlook may also impact your customers. If customers are more concerned about spending money on products and services, this can directly impact your business’s health. Businesses should consider new ways that they can support their clients and customers, whether that includes a fee adjustment or offering alternative service models.
Final Comments on Ontario’s Economic Update
Every business is different, and there is no “one-size-fits-all” solution to uncertain economic periods. The suggestions above are considerations which may or may not be relevant to your circumstances. Nonetheless, strategic planning is critical to weathering an economic downturn and ensuring the long-term viability of your business.
Contact the Business Lawyers at Campbells LLP in Oakville for Strategic Advice on Resolving Business Disputes
At Campbells LLP, our business lawyers have been helping businesses and business owners since 1999. We pride ourselves on the strong client relationships we have built since then. We take the time to understand your business before deciding on a course of action, keep you well-informed throughout the process, and ensure you make the best strategic decisions at every stage. In the event that a dispute arises and litigation becomes necessary, we are prepared to take proactive steps to protect your interests at every stage.
To speak with one of our trusted lawyers, contact us online or call our office at 905-828-2247.