Businesses cautiously optimistic: survey

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This article was published 17/03/2022 (1491 days ago), so information in it may no longer be current.

Tony Siwicki can see the smiles on customers’ faces as they enter Silver Heights Restaurant.

Groups are booking for spring and summer; the company is on a “gradual incline,” the eatery’s owner said.

“I’m optimistic that we’re on the right path, that we’re finally going to be able to start growing the business again,” Siwicki said. “I’m optimistic that we’re not going to go backwards (and) be shut down.”

A majority of business owners — 56 per cent — reported optimism over the future, according to Economic Development Winnipeg’s Manitoba Business Leaders Index, which it releases annually.

Still, it’s a cautious feeling. Optimism was down from the 66 per cent surveyed in March of 2021 and the 63 per cent of March 2020.

Inflation is playing a role. Siwicki might have to close his restaurant one day a week if costs increase.

“Our steak prices pretty much… doubled,” he said. “(We) can’t afford protein and labour at the same time.”

He’s removed some steak offerings from the menu, but — being a steakhouse — he has to keep some.

“The big ones had to come off because you can’t afford to charge what you want to charge,” he said. “I’m a blue collar restaurant. You can’t charge $60 for a steak.”

Seafood is another area Silver Heights Restaurant has scaled back. It’s facing increased costs after two years of reduced revenues.

“We’re never going to get the money back that we lost,” Siwicki said.

Forty-one per cent of EDW’s 203 respondents — a group of business owners and managers — reported being worse off this year than last.

Siwicki is also struggling to hire staff. He needs four servers and two bartenders to join his crew of 30. The number of incoming resumés is a small fraction of pre-pandemic levels, and roughly a quarter of those who make it to the interview stage don’t show up, Siwicki said.

“They’re applying just to say they’re applying,” he said.

He joins the 63 per cent in the Manitoba Business Leaders Index to state difficulties finding talent. Some companies, including Siwicki’s, are receiving resumés from people without relevant experience.

The shortages can lead to lost business.

“We’ll have customers saying, ‘Well, what about that table? It’s empty.’ Yeah, but I don’t have a server to serve (them),” Siwicki said.

‘We’re seeing a lot of businesses who believe there is a light at the end of this tunnel’– Dayna Spiring, Economic Development Winnipeg’s president

Manitobans must return to 2007 to find a time where the Business Leaders Index reported a bleaker look at finding staff. That year, 66 per cent of companies highlighted troubles, and in 2006, 72 per cent did.

This February, 70 per cent of rural and northern Manitoba respondents said they’re having a hard time finding workers, compared to 57 per cent in Winnipeg. Eighty-two per cent of companies with at least 50 people reported struggles, an increase from the 40 per cent of organizations with less than 10 staff.

Siwicki believes people will come back to the restaurant industry. And, folks will increasingly return to in-person dining, he said. Some are hesitant because they’re wary of restrictions rolling back or are careful of spending.

“Their habits have changed, their priorities have changed,” he said.

Forty-three per cent of index respondents said they’re intaking less revenue now than pre-pandemic, while one-third reported higher sales.

Nearly half of companies — 42 per cent — figure next year will be better for business. Another 32 per cent think things will stagnate, while 15 per cent believe it will get worse.

“We’re seeing a lot of businesses who believe there is a light at the end of this tunnel,” said Dayna Spiring, Economic Development Winnipeg’s president. “That’s what we’ve been waiting for.”

Many small businesses have been put in a hole due to the pandemic, and it’s time to dig them out, Spiring said.

“We need to see people back in offices,” she said. “We need bums in seats for this economy to recover.”

Twenty-eight per cent of those surveyed said they don’t expect any staff to return to the office. Another 68 per cent said employees will in some capacity.

Economic Development Winnipeg has been eyeing skilled workers across the country and internationally to boost the city’s businesses. Ukraine and Hong Kong are among the areas they’re scouting.

“Stability is a great asset these days, and I think a lot of people are going to seek that,” Spiring said.

Inflation has made the future uncertain, but some Manitoban companies selling commodities like grain and nickel will benefit, she said.

Canada’s February consumer price index unveiled a 5.7 per cent increase, year-over-year, in inflation — the largest gain since August of 1991.

“(It’s) truly global phenomena, and that’s perhaps fuelling the pessimism (in the Business Leaders Index),” said Loren Remillard, president of the Winnipeg Chamber of Commerce.

Supply chain and hiring complications make economic recovery hard for businesses, Remillard said. Many workers are expecting wages employers can’t afford, he added.

And, some companies can’t accommodate hybrid or work-from-home models, squeezing their applicant pool, Remillard said.

“What’s remarkable is (businesses) still have a high degree of confidence in the future,” he said.

Surviving two years of the pandemic has evoked their resilience, he said. He’s noted many entrepreneurs mentioning red tape and taxation as current problems — ones that took a backseat when COVID-19 struck.

“We’re not out of this, but we’re making the transition to learning to live with COVID,” Remillard said.

Forty-three per cent of Business Leader Index respondents said they’d laid off workers during the pandemic. Of those, 88 per cent expect to rehire in some capacity.

Probe Research conducted the survey in February, as Manitoba experienced an Omicron surge. There’s 95 per cent certainty the results are within plus or minus 6.9 percentage points of accuracy, though the margin of error increases within the survey population’s subgroups.

gabrielle.piche@winnipegfreepress.com