Businessman has no money. Unemployed and bankrupt man looks into his empty wallet. Stress crisis, unemployed businessmen waiting for new job, recession situation and hopelessness (Businessman has no money. Unemployed and bankrupt man looks into his em

Despite recent strength in the economy and signs of pent-up consumer demand, many businesses remain concerned about their survival, according to a new survey from Statistics Canada.

While recent economic data suggests that output has recovered to 97% of where it was before the Covid-19 pandemic, businesses remain concerned about their profitability in the short term, StatsCan reported.

The latest edition of the agency’s survey on business conditions, which was carried out from mid-January to mid-February, found that over two-fifths of businesses (41.8%) expect their profitability to decrease over the next three months, and almost one-third expect their sales will decrease.

For the hard hit accommodation and food services sector, well over half (56.4%) expect their profits to decline in the next three months.

“Businesses are concerned with future survival and expect to face a variety of obstacles in the short term,” StatsCan said.

Those obstacles include a lack of demand (29.2%) and volatile demand (31.4%), the survey found.

Additionally, 25.5% of firms pointed to the rising cost of inputs, maintaining sufficient cash flow to be obstacles in the months ahead. Other concerns for firms are managing debt (24.2%) and retaining skilled employees (24.1%).

Amid these concerns, the survey found that over half (51.3%) of respondents didn’t know how long they could continue to operate at their current revenue and expenditure levels before considering closing down or filing for bankruptcy.

StatsCan said 10.3% of businesses reported they have less than 12 months under current conditions.

In the accommodation and food services sector, 24.9% said they have less than 12 months to survive, and this was similar in the arts, entertainment and recreation sector (23.3%), it noted.

StatsCan also reported that 21.3% of businesses said they will have to consider layoffs in the next 12 months, and almost half (46.4%) aren’t sure how long they can continue before considering layoffs.

While most businesses see harder times ahead, StatsCan also found that 8.3% expect their profitability to increase in the next three months, most notably in the wholesale (13.3%) and retail trade (12.8%) sectors.