Metro Vancouver’s economy is showing signs of slowing down, thanks to the headwinds of rising operating costs, labour challenges, inflation and supply chain issues, says the Greater Vancouver Board of Trade (GVBOT).
GVBOT cites data from the Canadian Survey on Business Conditions, which suggests a general economic cooling.
“Despite record population growth, Metro Vancouver’s economy is showing signs of slowing,” GVBOT CEO Bridgitte Anderson said in a news release.
“As governments make budgetary decision for 2024, they need to ensure that our local small businesses are being supported instead of adding more costs, fees, and red tape which will only add to the uncertainty and cause the economy to deteriorate. A concern highlighted by our ‘Counting the Costs’ report, which calculated businesses will face nearly $6.5 billion in additional government-imposed costs between 2022-2024.”
In a survey, local businesses listed the following as the top concerns causing downward pressure on their businesses:
- rising inflation, 63.2 per cent;
- labour challenges, 50.2 per cent; and
- rising input costs 45.2 per cent
More than half the businesses surveyed (52.8 per cent) said they expect an increase in operating expenses in the next quarter, and 41.1 per cent expect “a meaningful decline in profitability.” About one-third expect a decline in cash reserves.
When it comes to transportation, 43.9 per cent of Vancouver businesses surveyed said transportation costs and availability was an obstacle to interprovincial trade.
“This summer’s Vancouver Port strike added to the financial pressures felt by the transportation sector and businesses that rely on it as an estimated $10.7 billion of trade was disrupted,” the report states.
The recent survey comes on the heels of a report last week that pointed to a severe industrial land shortage in Metro Vancouver that has resulted in vacancy rates of just one percent and which have translated into industrial land costs that are six times higher that of industrial land in Seattle or Calgary.
“With affordability, climate change, and geopolitical issues likely continuing to exacerbate supply chain challenges, Metro Vancouver must look at ways of build up the local economy," Anderson said.
"As the gateway to the western trade corridor Vancouver plays a crucial role in Canada’s reliability as a trading partner and by addressing the industrial lands shortage, we can lower transportation costs and increase benefits here at home.”