- Last “The real Economy, Canada“An RSM Canada report shows that businesses are turning to alternative suppliers amid growing demand ahead of the holiday season.
- The re-elected Trudeau government faces labor shortage obstacles on the way to economic recovery.
- The expected acceleration of the government’s climate change plan signals growth potential for from Canada green sectors.
TORONTO, October 19, 2021 / CNW / – RSM Canada (âRSMâ), a leading global provider of audit, tax and advisory services focused on mid-market companies, today launched its fall issue of “The truth Economy, Canada“ – a quarterly report that provides Canadian businesses with economic analysis and insight into the growth drivers, or economic headwinds, in Canada’s mid-market.
As the Delta variant continues to spread through an already fragile global supply chain, this year’s fourth edition of âThe Real Economyâ: Canadareport examines what the exhaustion of the global economy‘s supply of goods will mean for from Canada long-term growth and what Canadian businesses should look out for when trying to prepare for the critical holiday season ahead.
The report also sheds light on the challenges facing the new Liberal minority government after the election, the current outlook for from Canada workforce, and why the globalized labor market is a source of problems for from Canada business and professional services sector.
Key findings from this quarter’s report include:
Supply chain disruptions have subsided from Canada economic outlook
- Increased globalization and the resurgence of the coronavirus have created another supply crisis, as Canadian businesses scramble to find alternative resources as the critical holiday season grows.
- Disruption due to port closures, plant closures, product shutdowns and labor shortages will likely delay the return to full production until mid-2022.
- In addition, the crisis in the real estate sector in China, the standoff over raising the debt ceiling by United States, and disruptions in the global supply chain have all contributed to the volatility of global financial conditions.
Canadian businesses will face higher international shipping costs and depleted stocks for the foreseeable future
- Imports from China, Canada’s second largest trading partner, fell 30.9% to $ 3.9 billion in July, the record $ 5.6 billion in March.
- The average cost of shipping a container from Asia-Pacific, which accounts for 68% of all monthly shipping volumes to North America– increased by 63 percent during the period March-July, while the same cost of Europe increased by 79 percent.
- Many Canadian companies have been forced to look for other domestic suppliers who can compete on price.
- Lack of options may prompt the federal government to tackle interprovincial trade barriers.
Labor shortages will pose challenges for the recovery
- Falling participation rates and labor shortages will become a more acute problem over the next year.
- There has been a significant increase in vacancies this year, from 550,000 in the first quarter of 2021 to 730,000 in the second quarter.
- The positive impact of of Quebec childcare program – particularly on women’s labor market participation rates – suggest that a national program would be in the best interests of the Trudeau government.
- More women in the workforce could help tackle the labor shortage issues that threaten the recovery.
from Canada the professional services industry faces a significant talent drain
- Canadian law firms have been slow to respond to the current brain drain to United States’ boiling avocado labor market.
- The business and professional services sector had the third highest year-over-year job change rate, a whopping 22.84 percent. This includes crossing the border for new posts.
- Base salaries for entry-level lawyers in the largest firms in the United States have increased to $ 200,000, while Canadian companies have not followed suit.
- Canadian law firms risk losing talent to firms on both sides of the border given growth and the willingness of individuals to seek higher wages with a new employer.
However, there is potential for growth in from Canada green sectors
- The Trudeau government should accelerate its climate change plan after the election, taking more of an activist approach.
- The carbon tax – coupled with government incentives – lays the foundation to encourage the development of green industries and projects across the country.
“The global supply chain is already in a very fragile place and further disruptions will delay the return to full production in the Canadian economy until mid-2022” said Joe Brussels, Chief Economist at RSM US LLP. “This would create the conditions for more price volatility, at least until hesitation over the delta variant subsides and companies should prepare for a potential price hike.
Brusuelas continues: âBusinesses need to prepare for disruption as they prepare for the critical vacation season. Finding alternative domestic suppliers and adopting aggressive pricing strategies will offer companies rooted in the real economy the best approaches to cope with rising prices and the changing composition of supply and demand. “
Alex Kotsopoulos partner, projects and economy with RSM Canada, added: “In addition to these supply chain challenges, the re-elected Liberal government will face declining participation rates and continued labor shortages, which will likely remain a key issue for the economy. in the short and medium term. need to ensure that new spending programs address some of the key elements that could drive improvement from Canada productivity.”
For more information on RSM Canada’s âThe Real Economyâ: Canada‘, or to download the report, please visit their Web page.
About RSM Canada
RSM’s goal is to provide the power to be understood to our clients, colleagues and communities through world-class auditing, tax and advisory services focused on mid-market companies. The customers we serve are the engine of global trade and economic growth, and we are focused on developing leading professionals and services to meet their ever-changing needs in the ever-changing business environment of today.
RSM Canada LLP provides public accounting services and is the Canadian member firm of RSM International, a global network of independent auditing, tax and consulting firms with more than 48,000 people in 120 countries. RSM Alberta LLP is a limited liability company and independent legal entity providing public accounting services. RSM Canada Consulting LP provides consulting services and is a subsidiary of RSM US LLP, a member firm of RSM International. For more information visit rsmcanada.com, like us on Facebook, Follow us on Twitter and / or contact us on LinkedIn.
SOURCE RSM Canada
For further information: Media Contact: Stephen Colle, FleishmanHillard HighRoad, 416-939-6649, [emailÂ protected]