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August 28, 2023SURVEY ON BUSINESS CONDITIONS: Q3 2023 Statistics Canada has conducted its 13th iteration of the Canadian Survey on Business Conditions. In July and early August, Statistics Canada surveyed businesses to collect information on businesses' expectations, obstacles, plans and practices.
The results reported here are a selection of the impacts found for Nova Scotia businesses, by industry, by size of business (measured by number of employees), by age of business and by urban or rural location. There are comparisons of the Nova Scotia average (all industries, ages, sizes, locations) with the national and provincial averages. The horizontal axis in all charts measures the share of businesses reporting each outcome. The total for many outcomes does not add to 100% of respondent businesses as many replied that the outcome was not applicable in their circumstances.
Future outlook over the next 12 months
In Nova Scotia, 31.7% of businesses were very optimistic about the next 12 months; a further 41.0% were somewhat optimistic, 10.2% were somewhat pessimistic and 3.3% were very pessimistic. Nova Scotia's construction, mining, oil and gas, and professional and technical services industries as well as larger employers reported the strongest level of optimism. Pessimism was most prevalent in personal/repair services, accommodation/food services and agriculture/forestry/fishing industries as well as among smaller employers. Business optimism was slightly lower at the national level than in Nova Scotia with Québec and Newfoundland and Labrador enjoying the most optimistic outlook.
Business expectations for the next three months
The outlook for employment was stable for 80.6% of Nova Scotia businesses in the next three months. Rising employment is expected among 11.1% of Nova Scotia businesses while declining employment is expected by 8.4% of Nova Scotia businesses. Rising employment was most commonly reported by businesses in Nova Scotia's retail, accommodation/food services, professional and technical services industries as well as among employers with 20 to 99 employees.
58.4% of Nova Scotia businesses expect stable job vacancies (55.3% nationally) while 9.9% expect rising job vacancies and 4.4% expect falling vacancies. Expectations of rising vacancies were more prevalent in Nova Scotia's retail and construction industries. Across Canada, 6.1% of businesses expect rising job vacancies and 6.4% expect falling vacancies.
Rising sales were expected by 17.7% of Nova Scotia businesses while a further 67.3% expect stable sales. Declining sales were expected by 10.9% of Nova Scotia businesses. Rising sales were more commonly expected by businesses in Nova Scotia's accommodation/food services, wholesale and retail industries, along with newer businesses.
Rising prices were expected by 23.7% of Nova Scotia businesses while 68.9% expected stable prices. Only 3.1% expected price declines. Rising prices were notably more widely expected in Nova Scotia's retail, wholesale, accommodation/food services, construction, manufacturing, and mining industries.
Stable demand was expected by 64.9% of Nova Scotia businesses expected stable demand while 24.2% expected a rise in demand and 10.9% expected a fall in demand. Rising demand is more widely expected among Nova Scotia's health and social services, retail and construction industries.
Across Canada, rising demand is expected by 19.7% of businesses while falling demand is expected by 16.9%.
Business profitability is expected to remain the same for 59.4% of Nova Scotia businesses in the next three months while 12.4% expect rising profitability and 24.9% expect decreasing profitability. Rising profitability is expected more in Nova Scotia's retail, accommodation/food services and professional and technical services industries. Decreasing profitability expectations were more prevalent in Nova Scotia's agriculture/forestry/fishing businesses.
Rising operating income was expected by 19.6% of Nova Scotia businesses while 65.2% of Nova Scotia businesses expected stable operating income in the next 3 months. Falling operating income was expected by 15.2% of Nova Scotia businesses. Rising income was more commonly expected among retail, finance/insurance, and accommodation/food services businesses in Nova Scotia while falling income was more commonly expected by Nova Scotia's wholesale businesses.
Operating expenditures were expected to rise among 47.8% of Nova Scotia businesses while stable operating expenditures were anticipated by 48.3% of Nova Scotia businesses. Only 3.9% of Nova Scotia businesses expected declining operating expenditures in the next three months.
Rising cash reserves were expected by 7.7% of Nova Scotia businesses while 59.3% expected stable cash reserves. A further 23.3% of Nova Scotia businesses expect declining cash reserves. Rising cash reserves were more commonly expected among retail businesses in Nova Scotia while falling cash reserves were more commonly expected among Nova Scotia's arts and recreation industries.
Stable capital expenditures are anticipated by 62.0% of Nova Scotia businesses while 14.6% expect rising capital expenditures and 7.4% expect declining capital expenditures.
Only a small percentage of Nova Scotia businesses (3.2%) expect reductions in training expenditures. Rising training expenditures were anticipated by 13.8% of Nova Scotia businesses and stable training expenditures were expected by 56.7% of Nova Scotia businesses.
Stable marketing and advertising expenditures were expected by 52.6% of Nova Scotia businesses, with 11.7% expecting rising marketing/advertising spending and 6.9% expecting falling marketing/advertising expenditures.
Although research and development (R&D) expenditures were not relevant for over 63.0% of Nova Scotia businesses, 30.2% expected stable R&D spending and a further 4.2% expected rising R&D spending. Only 2.4% of Nova Scotia businesses anticipating reductions in R&D spending.
The vast majority of Nova Scotia businesses do not participate in imports or exports. Stable or rising imports were expected by 22.0% of Nova Scotia businesses (3.3% expect falling imports) while stable or rising exports were expected by 15.5% of Nova Scotia businesses (3.3% expect falling exports).
Obstacles for businesses
As part of the Survey of Business Conditions, businesses were asked about their obstacles. 19.7% of Nova Scotia businesses reported no substantial obstacles expected in the next three months (down from the previous quarter). Businesses in Nova Scotia's health and social services, arts and recreation, and agriculture, forestry and fishing industries were more likely to report no substantial obstacles. Across Canada, 15.4% of businesses reported no obstacles.
45.0% of Nova Scotia businesses reported some labour-related obstacles. These were most prevalent in Nova Scotia's construction, mining, oil and gas, retail industries.
Labour force shortages (31.8%) and recruiting skilled employees (33.5%) were the most common labour-related obstacles reported, followed by retention of skilled employees (22.8%).
Supply-chain issues were reported as business obstacles by 17.3% of Nova Scotia's businesses, particularly in construction.
Domestic input sourcing was the most widely reported business obstacle (13.0% of Nova Scotia businesses), compared with international input sourcing (5.3% of Nova Scotia businesses) or maintaining inventory (6.1% of Nova Scotia businesses).
Rising inflation was the most commonly cited business obstacle, reported by 48.3% of Nova Scotia businesses. This obstacle was most commonly reported by mining, oil and gas, manufacturing and finance and insurance businesses.
Among specific cost obstacles, input costs (40.9%) were the most commonly cited obstacle. However, there were substantial numbers that also reported obstacles from insurance costs (32.8%), transportation costs (33.1%), interest/debt service costs (35.4%) and property/real estate costs (18.8%).
Market conditions were less commonly cited obstacles. Insufficient demand was reported as an obstacle by just 8.7% of Nova Scotia busineses. Fluctuating demand was noted as an obstacle by 17.0% of Nova Scotia businesses. Increasing competition was cited by 11.4% of Nova Scotia businesses as an obstacle.
Cash flow and debt management were identified as an obstacle by 17.8% of Nova Scotia businesses - especially in personal and repair services industries.
Financing was cited as an obstacle by just 8.6% of Nova Scotia businesses.
Source: Statistics Canada. Table 33-10-0686-01 Future outlook over the next 12 months, second quarter of 2023; Table 33-10-0665-01 Business or organization expectations over the next three months, second quarter of 2023; Table 33-10-0666-01 Business or organization obstacles over the next three months, second quarter of 2023
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