SOURDOUGH bread is a star in these economic conditions.

Few ingredients, high demand.

“(It’s) one of the things we’re really trying to lean into,” said Tabitha Langel, co-founder of Tall Grass Prairie Bread Co.

Nearly four in 10 Manitoba businesses expected to increase their prices amid a period of higher interest rates, continued inflation and cutbacks in consumer spending, new Canadian Chamber of Commerce data found.

Businesses were surveyed in January and February; results are being broadcast today during the 2023 Manitoba Economic Summit.

The Canadian Chamber’s chief economist is calling Manitoba’s current period a “slow growth phase” — less consumer spending, less innovation, fewer hiring frenzies than those seen in the recent past.

Tall Grass Prairie is bucking the norm. It has more sales than pre-pandemic, according to Langel.

However, prices are a drain. Operating costs have jumped 20 to 30 per cent since COVID-19 hit, Langel said.

“You can’t always pass it on to the customer,” she added. “(It’s) that balancing act. You have to try and be creative with… can we do something more with less?”

So the shop is pumping out sourdough, which grew its fanbase during the pandemic. Price hikes are still necessary, but customers generally understand, Langel said.

She’s among the 74 per cent of Manitoba business owners to feel optimism for the future, despite the cost pressures companies continue to clock.

“There’s a joie de vivre that’s in the air,” she exclaimed. “People want to gather.”

The cost of wool is up, and it’ll probably increase more, noted Josh Zaharia.

But though he watches customers stick to budgets as they shop, they’re there, in person — and he’s “pretty excited.”

“Last year, we would have events, and maybe two or three people would show up,” said Zaharia, Wolseley Wool’s co-owner. “This year, it’s coming back to bigger groups. We’re just seeing more attendance every time we do something.”

Shopping habits have changed, he’s noticed — there are fewer spontaneous purchases at the yarn shop.

Spending declined at a faster pace in Manitoba than nationally this year, the Canadian Chamber of Commerce found. The decline doesn’t dip to the valleys Manitoba experienced last spring and during the end of 2020 (or that year’s spring).

“We’re in a slow and a rough patch, but Manitoba should do better than the rest of Canada,” said Stephen Tapp, chief economist for the Canadian Chamber of Commerce.

The province has a diverse economy and has historically fared better than the national averages during periods of recession, Tapp noted. Manitoba’s gross domestic product grew 3.9 per cent last year, more than any year since at least 2017; employment jumped 3.4 per cent between February 2020 and last March, the Canadian Chamber found.

“I’m not anticipating any major waves of layoffs,” Tapp said. “We’re not expecting this hiring binge to continue (either)… We’re kind of expecting the labour market to come back into equilibrium.”

Manitoba’s unemployment rate may slightly increase, Tapp said, adding forecasts could change rapidly based on global events.

Twenty-one per cent of Manitoba companies said they’d delay hiring, when asked in January and February. Thirty-two per cent expected to reduce investments and 13 per cent prepared to cut staff.

Canadian businesses listed inflation, input costs and interest rates and debt costs as their top business obstacles in the recent survey.

Running a convenience store isn’t profitable, noted Monissh Kapoor, who’s owned Barchet’s Grocery for just over a year.

“The cost of living has gone up, everything’s gone up,” he said, adding “everybody wants to save a buck or two” and buys from a box retailer.

Nationally, more than 20 per cent of respondents to the Canadian Chamber’s survey said they couldn’t take on more business debt.

“Businesses are stretched, they’ve leveraged everything through the pandemic to get them through the pandemic,” said Loren Remillard, president of the Winnipeg Chamber of Commerce.

“There are no cash reserves — you’ve got no money to actually invest in innovation and productivity.”

Meantime, Remillard saw plenty of startups register with the local chamber.

“One of the legacies of the pandemic is many people opting to pursue an entrepreneurial path,” he said. “Whether that’s sustainable, we’ll see.”

Manitoba had 28,800 active businesses last January, up 1.3 per cent from the prior year. A majority — 19,200 — were concentrated in Winnipeg, which saw its number of businesses grow 2.9 per cent.

“From my viewpoint, whenever there’s times of uncertainty and challenging economic times out there, it means that things are changing,” said Luc Bohunicky, who opened Avid Golf last October.

Some of the world’s largest companies started during such times — just look at Facebook, said Bohunicky.

“I started a business in an industry where I knew the demand for my product was greater than the supply,” he said.

During the winter months, he turned customers away for lack of space. He’s expecting the summer to be slow because of warm weather, not because of a province-wide slow growth period.

Tapp’s team found Manitoba’s workplace mobility — staff returning downtown — lags behind the national average. Remillard hypothesizes more workers came back to Winnipeg sooner than those in other cities, and larger cities have more staff to bring back.

gabrielle.piche@winnipegfreepress.com