Supply Chain Challenges for Manufacturers

Statistics Canada

Many jurisdictions had implemented stricter public health measures during the fourth quarter of 2021 and continued through the first quarter of 2022 to combat the spread of the Omicron variant of COVID-19. The combination of inflationary pressures, labour challenges, public health measures, and supply chain issues have impacted businesses in various ways.

From January to early February 2022, Statistics Canada conducted the Canadian Survey on Business Conditions. The survey collects information on the environment businesses are currently operating in and their expectations moving forward. One of the biggest anticipated challenges for manufacturers was the continuation of supply chain issues.

Nearly one-third (32.1%) of businesses expect difficulty acquiring inputs, products, or supplies domestically in the next three months, but this number is 53.2% within manufacturing. When it comes to difficulty acquiring inputs, products, or supplies from abroad, 32.5% of manufacturers identified this as a problem.

Over half (52.4%) expect these supply chain challenges to continue for six months or more, while 33.1% are uncertain how long these challenges will persist. Not only is the acquisition of inputs an issue, but 73.7% of manufacturers indicated that the rising costs of said inputs is a point of concern. The increased cost of transportation is also an issue for 53.3% of manufacturers.

Of businesses that expect supply chain challenges over the next three months, 71.9% reported that challenges experienced by the company have worsened over the last three months. Leading factors that contributed to worsened supply chain challenges were increased delays in deliveries of inputs, products, or supplies (84.7%), increased prices of inputs, products, or supplies (76.3%), and supply shortages resulting in fewer inputs, products, or supplies being available (75.8%).

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