Photo: Annik MH de Carufel Le Devoir
Shortages of labour are observed especially in the information technology, tourism and hospitality, as well as in the construction and real estate, sectors that have experienced strong demand. Our photo : the restaurant of the Institut de tourisme et d’hôtellerie du Québec.
The companies have never worked as close to the limit of their production capacity in Canada since the Great Recession. This announcement, for their part, new investments, new hiring and wage increases. This also suggests that, on the part of the Bank of Canada, a rise in interest rates as early as next week.
Even after months of growth, a majority of canadian companies continue to bet on an acceleration of their sales during the next year, ” referring to the robustness of real estate markets, the persistence of foreign demand and of the practical support that represent the stimulus spending of the federal government “, reports the Bank of Canada in the winter edition of its Survey on the business outlook revealed on Monday.
The business are currently going so well for more than half (56 %) of canadian companies that they would find it difficult to cope with an unexpected increase in demand. We had not seen it since the end of 2007. Before that, this proportion was higher than only one other time since we started this survey, 18 years ago, has subsequently noted economist of the Bank of Montreal’s Douglas Porter.
The problem is particularly widespread in British Columbia, but is also “more” apparent in Ontario and Quebec, is suing the canadian central bank, in its investigation report based on surveys carried out from 14 November to 8 December. The situation has compelled companies to turn ” especially to the sub-contracting, outsourcing, immigration, and automation “. But this was not enough. Nearly 50 % of companies intend to increase their investments in their production capacity, compared to only 20 % who think the reduce for a balance of opinions favourable to the increase of capacity of 30 %, or nearly double this fall. The intentions of the new hires are also on the rise, with 5 times more companies that say they want to speed up the entry of new employees to the contrary (50 % vs. 11 %).
Shortage of labor and wages
Several companies, however, are likely to have difficulty to increase their workforce. Nearly half of them reported having been faced with an intensification of the problem of a shortage of labor for the past year, while only 11 % believe it has decreased.
“The shortages occur, especially in the areas of information technology, tourism and hospitality, as well as the construction and real estate, or spheres that have experienced a high demand,” says the Bank of Canada in its report.
These difficulties are slow for the time being to affect the level of wages, observe-t-on. More and more companies expect to nevertheless have to accelerate the increase in the hourly cost of their workforce over the next 12 months, all the more that the minimum wage has been substantially increased in several provinces.
The province of Quebec comes, in this chapter, in the second rank with a small favourable variance of 6 percentage points between companies that believe that they must increase the rate of their wage increases and those who say the opposite, that is, 2 percentage points lower than in British Columbia and two times more than in Ontario.
Trump and the interest rate
Three-quarters of companies think that the pressure exerted by the competition will not be allowed to take the expected increase in the cost of inputs on to their customers. We are expecting an increase of exports, in particular to the United States due to the dynamism of their economy stimulated by the tax cuts of the government Trump and the weakness of the canadian dollar, but in spite of the rise of protectionism and concern the renegotiation of the free trade Agreement north american (NAFTA).
This new report more than positive about the state of mind of business leaders is in addition to other statistics — such as data on employment, Friday, on the decline in the unemployment rate to its lowest level in more than 40 years, 5.7 % in Canada and 4.9 % in Quebec, describing an economy that is going so well that she might soon give signs of overheating.
In this context, “it is clear that the canadian economy no longer needs as much stimulus,” and that the Bank of Canada needs to think progressively raising its interest rates, said Monday the chief economist of the Mouvement Desjardins, Benoit P. Durocher. The first increase of 0.25 percentage point is expected to come in its meeting next week, ” he said. “Two more hikes could be announced in the course of the year 2018. “