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The inflationary pressures of the post-pandemic landscape have created tremendous economic challenges, squeezing businesses across the board and creating unprecedented levels of uncertainty.
Soaring prices and a range of related challenges have taken a significant toll on the economy, with annual inflation accelerating to a 39-year high in 2022, before slightly easing in July. And while it’s unclear if the Consumer Price Index (CPI) will climb or abate in the months going forward, broad-based inflation doesn’t appear to be going away any time soon. In fact, the Bank of Canada doesn’t foresee a return to its 2% inflationary target until the end of 2024.
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While the central bank has raised interest rates in its efforts to tame prices, there are many related challenges that aren’t easy to solve. Labour shortages, fluctuations in demand and supply chain disruptions due to geopolitical events like the Russia-Ukraine conflict and tensions between China and Taiwan, wreaking havoc on the even the best-laid plans.
Given the level of volatility, businesses need to be proactive in managing the impacts; however, data from the 2022 Grant Thornton International Business Report (IBR) suggests that Canadian businesses have been slower to act than their global counterparts.
According to the report, which provides a comprehensive overview of the challenges mid-market businesses are facing, common actions to combat inflation are only being pursued by about a quarter of Canadian businesses. When taking a closer look at the 12 specific actions cited in the survey, Canadians ranked lower than the global average in every category except for one.
Dowload the complete document on Grant Thornton Canada web site.