Over fifty percent of Canadian business-people will limit Investment in 2019 because of the lack of qualified workers.
Jan 15, 2019, —Investment intentions among Canadian entrepreneurs remain stable amid a shortage of qualified labour and confidence in the economy, according to the Business Development Bank of Canada’s (BDC) fourth annual report on the investment intentions of small and mid-sized enterprises (SMEs).
Over half of SMEs (53%) say the labour shortage will cause them to limit business investment in 2019. This is the second year in a row the problem is cited as the top obstacle to investing. In a previous study, BDC found that SMEs are struggling to find new employees and the problem will not improve. Next-cited reasons for not investing are insufficient cash flow (48%) and confidence in Canada’s economy (43%).
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Business optimism remains stable nationwide, with 73% of SMEs expecting their revenues will grow in 2019, compared to 72% last year.
At the same time, SMEs are shifting their investment plans to reflect the digital transformation of Canada’s economy, with four in 10 businesses planning to devote all or some of their investment to new technologies.
“It is encouraging to see some optimism from Canadian businesses as they adapt to the labour shortage and digital technology,” says P. Cléroux, Vice President, Research and Chief Economist at BDC. “SMEs make up 99.7% of Canadian companies, so their success is crucial to the economy. Companies can better meet today’s challenges if they invest in retaining workers, hiring newcomers to Canada and adopting new technology.”
Other BDC findings:
- The sectors with the brightest investment outlook are wholesale, technology and business services.
- Exporting businesses are more likely to plan new investment in technology, thanks to a low Canadian dollar and strong U.S. demand.
- More entrepreneurs plan to invest in intangible assets such as software and intellectual property. High-growth firms are focused on buying new technology, with 59% planning such investments compared to 43% of all businesses.
The 2019 BDC Investment Intentions report is based on a phone survey of 4,024 business owners conducted in the Fall of 2018.
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