However, there are grounds to believe that supply-chain disruptions may be less common. As COVID-19 restrictions ease, consumer demand is projected to shift to services rather than products. Still, the knock-on consequences of Russian offensive-related disturbances could prolong the process.
“Even as the global supply chain recovers rapidly, labor shortages are projected to remain an impediment to production growth,” the commentary said. “In fact, for many companies, retaining and hiring new employees has become a bigger issue than a lack of orders.”
Many enterprises in high-contact service-sectors severely damaged by the pandemic have seen a large proportion of pre-pandemic employees move to other jobs or industries. In practically all industries in Canada, the number of unemployed people per job posting is below pre-pandemic levels; In the housing and food service industry, the number of workers still exceeds 300,000 from pre-COVID-19 levels as of January.
RBC noted that tight labor markets are a positive economic sign, indicating that the economy has largely recovered. The authors noted that the percentage of employees who change jobs every month is increasing, noting that job-switching accounts show a higher wage increase than a job-switching salary increase. More people are leaving business due to ‘dissatisfaction’ without a quick replacement situation, indicating that workers’ confidence in the labor markets has strengthened.
Businesses in Canada expect to hire more workers and pay more for them, but they are also investing in increasing existing workforce productivity in response to increasing demand, RBC said. Most industries expect to invest more in 2022 than before the arrival of COVID-19 in 2019.