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Kevin Carmichael<\/span> <\/div><\/div>\n<\/picture>The bigger issue for companies at this stage of the economic recovery is filling the orders that are piling up.<\/span> Photo by Carlos Osorio\/Reuters files<\/span> <\/figcaption><\/figure>\n<\/header>\n\nArticle content<\/h2>\n The economy was always going to rally as soon COVID-19 restrictions were eased. But now that the easy phase of the recovery is over, we\u2019ve entered a stage where the path to good times becomes less obvious. The future looks bright, but are we confident we know how to get there?<\/p>\n<\/section>\n
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This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n\nArticle content<\/h2>\n Canada\u2019s businesses rode outsized annualized growth rates of 5.5 per cent and 9.3 per cent in the first quarter of 2021 and the final quarter of 2020, respectively. Still, many of them were waiting for the next shoe to drop as summer ended, according to a survey of 16,900 employers released on Sept. 23 by the Canadian Chamber of Commerce.<\/p>\n
The country\u2019s job creators were confident about the short term in July and August, when Statistics Canada conducted the poll on the chamber\u2019s behalf: 85 per cent said they expected demand would stay the same or increase over the next three months, compared with 62 per cent at the start of the year. They also liked the look of the horizon: 76 per cent of respondents said they were either \u201csomewhat optimistic\u201d or \u201cvery optimistic\u201d about the next 12 months.<\/p>\n<\/section>\n
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This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n\nArticle content<\/h2>\n That jibes. Economic growth was solid, if unspectacular, before the pandemic triggered an epic recession in March 2020. The jobless rate was about as low as it\u2019s ever been. The forces responsible for those numbers \u2014 immigration and the shift to a digital economy \u2014 remain in place. The crisis even accelerated the embrace of digital technology, while immigration will return to earlier levels now that travel restrictions are being eased.<\/p>\n
\u201cWe\u2019re just seeing steady growth in container volume,\u201d Robin Silvester, chief executive of Vancouver Fraser Port Authority, which oversees Canada\u2019s biggest port, told the Financial Post\u2019s Bianca Bharti on Sept. 23. \u201cOver the last two years, there\u2019s been growth ahead of the rate we would have expected. It really comes down to a growing population in Canada.\u201d<\/p>\n<\/section>\n
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This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n\nArticle content<\/h2>\n But what about six months out? Or nine? The chamber\u2019s survey didn\u2019t specifically ask, but it picked up a sense of trepidation about all the things that could go wrong between now and a post-pandemic world where the shift to green energy and a digital economy promises to create a once-in-a-lifetime opportunity to generate profits.<\/p>\n
Almost 40 per cent of respondents said they were unsure how long they would last before they considered shutting down, and 33 per cent said they didn\u2019t know how much longer they could carry on before considering layoffs, up from 18 per cent in the second quarter.<\/p>\n
It\u2019s easy to understand where the fear is coming from. It was becoming clear in August that COVID-19\u2019s Delta variant was going to wreak havoc, no matter how high a country\u2019s vaccination rate happened to be.<\/p>\n<\/section>\n
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This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n\nArticle content<\/h2>\n Such wariness was warranted: the average new cases per million people has surged in Saskatchewan and Alberta over the past seven days compared with the average over the previous 28 days, according to data compiled by National Bank\u2019s economics team. Case counts are also rising in Quebec, New Brunswick, Manitoba, Prince Edward Island, Nova Scotia and Newfoundland and Labrador. That will weigh on business confidence. Figuring out how to handle the Christmas shopping season has become more difficult in recent weeks.<\/p>\n
But perhaps the bigger issue for companies at this stage is filling the orders that are piling up. The supply shortages that have come to characterize the COVID-19 recovery are proving to be more persistent than many expected. The most likely scenario remains that the shortages will recede as producers ramp up production, supply-chain bottlenecks start to loosen and workers return to the labour force. But it\u2019s become hard to predict when conditions might return to normal.<\/p>\n<\/section>\n
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This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n\nArticle content<\/h2>\n The chamber\u2019s survey shows that the biggest obstacles companies are reporting relate to supply, the inverse of 2020 when executives were mostly troubled by a lack of demand. Thirty-five per cent of respondents said some combination of rising input costs, recruiting skilled workers and overall labour shortages would cause them the most difficulty over the next three months.<\/p>\n
\u201cBusinesses are telling us we have shifted to a phase where supply is going to be the biggest concern, rather than demand,\u201d Stephen Tapp, the chamber\u2019s chief economist, said in an interview. \u201cThe supply side is now the key issue for Canada\u2019s economy.\u201d<\/p>\n
That adds to the danger. It\u2019s been a long time since supply registered as a threat to growth. The smooth flow of ever-cheaper goods and services is something that most decision-makers had come to take for granted, a steady state created after a few decades of globalization centred around China\u2019s rise as supplier to the world.<\/p>\n<\/section>\n
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This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n\nArticle content<\/h2>\n New realities heighten the risk of unintended consequences. NFI Group Inc., the Winnipeg-based maker of buses, unexpectedly cut its revenue outlook earlier this month after it realized it wasn\u2019t going to be able to source enough parts. The company\u2019s stock price was still down about eight per cent a week after it made the disclosure.<\/p>\n
Mistakes will be made in the months ahead, but so will fortunes. Growth will depend on people who are willing to take risks, and hopefully they outnumber those who end up frozen by uncertainty. Odd Burger Corp., a Toronto-based vegan fast-food chain, plans to push through all the headwinds facing its industry. James McInnes, the founder and chief executive, is investing in state-of-the-art technology to keep his costs down.<\/p>\n
\u201cThe way you beat inflation is to become more efficient,\u201d he said in an interview earlier this month. \u201cWe\u2019re trying to disrupt.\u201d<\/p>\n
\u2022 Email: kcarmichael@postmedia.com | Twitter: