Outlook of rural businesses, second quarter 2022
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Released: 2022-06-20
As the purchasing power of consumers and businesses decreased along with rising prices, Canadian rural businesses continued to adapt to changing business conditions in the spring of 2022. This analysis of the Canadian Survey on Business Conditions, second quarter of 2022, examines the evolving practices of rural businesses and their expectations for the future.
Rural businesses concerned about the cost of inputs, transportation and insurance
Close to three-fifths of rural businesses (58.0%) expected the rising cost of inputs to be an obstacle over the next three months. This remained the most-frequently cited short-term obstacle for the sixth consecutive quarter. The next three most common short-term obstacles cited by rural businesses were transportation costs (48.2%), cost of insurance (40.6%), and recruiting skilled employees (39.4%).
Chart 1
Top four obstacles for rural businesses over the next three months
As part of their response to the concerns related to these costs, just over two-fifths (40.6%) of rural businesses reported that they expected to raise their prices in the next three months.
Energy expenses expected to increase for rural businesses
Close to three in five (59.4%) rural businesses and just over two in five (40.8%) urban businesses expected that their energy expenditures will increase in the short-term. In response, a majority of both rural (55.7%) and urban (57.2%) businesses reported planning to increase their prices. Rural businesses were more likely than urban ones to report other plans in response to increased energy expenses.
Chart 2
Most common plans among businesses expecting an increase in energy expenses over the next three months
Supply chain difficulties are expected to continue
Close to two-thirds (65.4%) of rural businesses expecting supply chain difficulties in the short-term reported that these challenges had intensified over the previous three months. The most commonly cited factors for this increase were delays in deliveries (81.2%), increased prices (76.6%) and shortages (73.2%).
Nearly three-fifths (56.9%) of rural businesses anticipating domestic supply chain issues expected them to continue for at least six months, while just over half (51.7%) of rural businesses predicting foreign supply chain issues believed that they would continue for at least six months.
Three-in-five rural businesses predicting labour challenges expect that management will have to work longer hours
Among rural businesses anticipating labour-related obstacles in the near future, the expected impacts were management working increased hours (58.5%), existing staff working more hours (47.9%), hiring criteria being less selective (38.7%), and business growth being compromised (38.0%).
Chart 3
Most commonly expected impacts of labour-related obstacles over the next three months
Note to readers
This analysis focuses on businesses in rural areas, using second quarter 2022 results from the Canadian Survey on Business Conditions. The 2016 Census Subdivision Boundary File was used to identify all businesses' census subdivisions (CSDs) based on location. Businesses located in CSDs classified as either census metropolitan areas or census agglomerations were classified as urban. All businesses in other locations were classified as rural.
This survey was conducted by Statistics Canada from April 1 to May 6, 2022, to develop an understanding of the current practices of businesses and of their expectations moving forward. When respondents were asked questions pertaining to their expectations over the next three months, that three-month period could range over the period from April 1 to August 6, 2022, depending on when the business responded. Similar date ranges apply to questions pertaining to expectations over the next 12 months.
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The full article "The outlook of rural businesses, second quarter of 2022" is now available as part of Rural and Small Town Canada Analysis Bulletin (21-006-X).
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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