Business Confidence Hits Record Low, Chamber Report

(TORONTO– February 7, 2023) – Business confidence has dropped to a new low according to the Ontario Chamber of Commerce’s (OCC) seventh annual Ontario Economic Report (OER).

“Ontario business confidence has dropped to a record low in 2023. Labour shortages, inflation, health care system vulnerabilities, and forecasts of an economic contraction are dampening confidence in the province’s economic outlook,” said Rocco Rossi, President and CEO, OCC. “Only 16 percent of organizations surveyed have confidence in the economy. This is down from 29 percent from last year. Promisingly, most businesses feel confident they can withstand these headwinds and continue to grow in the year ahead.”

The 2023 OER contains regional and sector-specific data on business confidence, public policy priorities, regional forecasts, and timely business issues such as employee health and well-being, climate change, succession planning, diversity and inclusion, reconciliation, and remote work.

“This year’s OER makes it clear that leaders in the public and private sectors must invest strategically in productivity, resilience, and long-term growth,” said Claudia Dessanti, Senior Manager, Policy, OCC. “Unsurprisingly, labour shortages continue to dominate as a source of concern directly impacting most employers and 87 percent of large businesses. Shortages are especially acute in specific sectors such as education, construction, and accommodation and food services.”

“This year’s report shows what we have been hearing from our business customers. While inflation and shortages in labour supply are having an impact, organizations are optimistic about their outlook and growth prospects,” said Megan Telford, Chief Human Resource Officer at Hydro One Networks Inc. “We remain committed to doing our part, to provide relief to our customers, and make critical energy infrastructure investments to ensure businesses have access to reliable and sustainable electricity when they need it. These investments will be crucial to attract new businesses, create jobs and help communities grow.”

Key highlights of the report include:

• Business confidence has dropped to a new low, with only 16 percent of organizations expressing confidence in the outlook of Ontario’s economy in 2023 (down from 29 percent in 2022).
• Inflation and labour shortages are primary concerns for organizations.
• Despite low confidence in the economy, 53 percent of businesses are optimistic about the outlook and growth prospects of their own organizations, as high employment rates and population growth should prevent a sharp decline in consumer spending.
• Small businesses want governments to prioritize policies and programs that support their immediate financial and operational challenges, while large businesses are more interested in broader workforce development and health care issues.
• Labour shortages are directly impacting most employers and 87 percent of large businesses. Shortages are especially acute in education, construction, and accommodation and food services.
• Businesses appreciate the importance of employee health and well-being, diversity and inclusion, economic reconciliation, and climate action – but there are notable gaps in addressing them.

The seventh annual OER offers unique insights into business perspectives across Ontario. It is informed by data from our annual Business Confidence Survey (BCS) and economic forecasts for the year ahead. The BCS was conducted online from October 18 to November 30 2022, attracting responses from 1,912 organizations across Ontario.

The OER was made possible by OCC’s Landmark Partner, Hydro One, and Research Partners, Golfdale Consulting and Bank of Montreal. Read the report.

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About the Ontario Chamber of Commerce
The Ontario Chamber of Commerce (OCC) is the indispensable partner of business and Canada’s largest, most influential provincial chamber. It is an independent, not-for-profit advocacy and member services organization representing a diverse network of 60,000 members. The OCC’s mission is to convene, align and advance the interests of its members through principled policy work, value-added business services and broad engagement to drive competitiveness and economic growth in the province.

For more information, please contact:
Andrea Carmona
Manager, Public Affairs,
Ontario Chamber of Commerce
andreacarmona@occ.ca | Mobile: (647) 234-0255