The housing market helped keep Canada’s business outlook on the right foot in the last quarter, according to the Bank of Canada, which credits the sector for keeping the economy churning through some tough times despite some supply chain challenges.
“Sales are expected to remain solid for most firms in sectors that have fared well during the pandemic, namely housing, retail and manufacturing,” the bank said in its Business Outlook Survey. “However, further growth in sales for other firms in these sectors is increasingly held back by supply-side constraints.”
If there’s one dark cloud hanging over the housing sector, it’s getting the materials needed to build houses into the hands of those who do the work. A Zonda (Livabl’s parent company) survey undertaken in the U.S. reflects this, showing that 100 per cent of builders felt supply chain issues would affect them in the coming months.
Every month we’ve asked builders if they are experiencing supply chain disruptions. Big jump this month:
August: 93% yes
January 2022: 100%
— Ali Wolf (@AliWolfEcon) January 14, 2022
“Reports of supply chain bottlenecks and labour shortages remain elevated,” the bank said. “Firms cited robust growth in demand, although those offering hard-to-distance services still had sales below pre-pandemic levels, even before the Omicron variant began spreading broadly. The combination of strong demand and bottlenecks in supply is expected to put upward pressure on prices over the next year.”
The bank added: “A few businesses cited long delays for the delivery of new trucks, heavy equipment and other industrial machinery as a source of uncertainty that is holding back their investment.”