Outlook of rural businesses, first quarter 2022
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Released: 2022-03-17
As real gross domestic product grew in the last quarter of 2021 and inflation hit a 30-year high in January, rural businesses in Canada continued to adapt to changing business conditions. This analysis of the Canadian Survey on Business Conditions, first quarter of 2022, examines the evolving practices of rural businesses and their expectations for the future.
Over half of rural businesses expect rising cost of inputs to be an obstacle over the short term
More than half of rural businesses (56.0%) expected the rising cost of inputs to be an obstacle over the next three months, remaining the most frequently cited short-term obstacle for five consecutive quarters. The three next most common short-term obstacles rural businesses cited were the cost of insurance (42.2%), transportation costs (39.4%) and recruiting skilled employees (38.0%).
Chart 1
Top four obstacles for rural businesses over the next three months
Supply chain difficulties worsen and are expected to continue
Close to three-quarters (71.9%) of rural businesses expecting supply chain difficulties in the short term reported that these challenges had intensified over the previous three months. Over half (51.6%) of these businesses expected that supply chain issues will become worse over the next three months.
Almost three-fifths (58.4%) of rural businesses anticipating domestic supply chain issues expected them to continue for at least six months, while a similar proportion (62.0%) of rural businesses predicting foreign supply chain difficulties also believed that they would continue for at least six months.
Close to two-thirds of rural businesses affected by supply chain difficulties looking for alternative supply sources
In response to supply chain issues, the affected rural businesses have adopted various strategies to mitigate their impacts. The most commonly implemented strategies by these businesses were searching for alternative supply sources (63.6%), maintaining higher inventory levels (50.4%), increasing communications with suppliers or wholesalers (49.8%), and monitoring shortages, delays or disruptions for critical inputs, products or supplies (49.7%).
Chart 2
Most commonly adopted strategies by businesses in response to supply chain challenges
Share of rural businesses planning to increase employee wages decreases but continues to be most common retention strategy
While the percentage of rural businesses that were planning to increase wages for their existing employees over the next 12 months fell from 49.1% to 43.4% from the previous quarter, it still remained the most common strategy in terms of retention, recruitment and training. The other most common approaches were increasing the wages offered to new employees (22.6%) and offering flexible scheduling (22.3%).
There was a decrease in the share of rural businesses that anticipated that all of their workforce would work exclusively on-site for the next three months, from over four-fifths of rural businesses (80.9%) in the fourth quarter of 2021 to 62.0% in the first quarter of 2022.
Chart 3
Most common recruitment, retention and training plans for businesses
Note to readers
This analysis focuses on businesses in rural areas, using first 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 January 4 to February 7, 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 January 4 to May 7, 2022, depending on when the business responded. Similar date ranges apply to questions pertaining to expectations over the next 12 months.
Products
The full article "The outlook of rural businesses, first 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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