Sure. Thanks, Garth.
To illustrate a little of the impacts of energy pricing on small and medium-sized firms and the manufacturing sector, I wanted to show you a survey that CFIB did last fall, following Hurricane Katrina, when the fuel prices suddenly spiked to a certain degree. A lot of firms were feeling the impact fairly quickly, and we wanted to get a feel at that point. We actually presented this information to the industry committee last fall. It is the second piece on the right-hand side of your folder, behind the QBB--that presentation.
I'm just going to pull out two quick ones here. First we asked them about what impacts those higher fuel prices were having right then, at that point, on their firms. You'll see on this chart that the red bar indicates businesses losing money as a result. For manufacturing, about 15% said that at that point they were losing money as a result, but the interesting thing was that 71% said they were still profitable, but less so, and another 9% were saying profits remained intact.
When you look at the chart, you can see that industries like transportation, primary, and agriculture were finding it much more difficult to deal with this issue at that time.
The next chart looks at it going forward. If those types of fuel costs remain going forward, how will you be able to survive in the future? Can it be sustainable? What was interesting here too is that the manufacturing industries, again, seem to be a little more adaptable than some of the other industries if high fuel prices continue to be in place, and we have found them to remain around the one-dollar mark, and higher, right across the country.
Manufacturing, the red bar, says businesses may not be able to survive if prices stay at today's levels. You can see 5% said that was the case. That is far fewer than in agriculture, where one in four said they would be struggling to survive if those prices remained high. However, 42% did say they would have to make significant changes in investment, employment, or costs in order to deal with the high fuel prices, so that is something to consider. That is in the industry average across all of the different sectors.
Finally, 51%--about half of them--did say they could deal with the current fuel prices with only minor adjustments to their businesses. They are able to adapt to that situation.
Now, we recognize that energy prices are more than just fuel costs. There are also electricity costs and other things as well. We just pulled out some data this morning; we asked our members about the significance of input costs to their businesses and actually pulled out electricity costs from fuel costs. Even there, among the manufacturing firms, we found that fuel costs have by far the biggest impact right now--even more than electricity costs, for example. I think this is a fairly good indicator of how manufacturing firms--and all sectors of the economy, really--are dealing with this issue.
This isn't the only thing they're dealing with, of course. We also have a chart showing our members' high-priority issues. Two issues they have indicated are very important to their businesses are government regulations and paper burden, and the shortage of qualified labour. Those are the two fastest-growing issues our members are facing.
When you go to the bottom chart, you'll see that the concern over the shortage of labour has been broken down a little bit more. You get a better sense of how the skilled labour issue is being addressed across the country and across sectors. You can see it is obviously a much bigger issue in western Canada than it is as you move east. When you look at it by sector, you'll notice manufacturing is certainly within the top five, but again it is not the only sector feeling this issue is having a big impact on them.
Now these are perceptions, of course. We wanted to get some facts around how big this issue is. Could you look at slide 12?
Early this year we released a report called Help Wanted, which is also in your package. It's the last report on the right-hand side. Through that report we were able to determine that right now the vacancy rate among small and medium-sized firms is at 3.2%, an increase from 2.7% about a year ago.
That may not seem like a lot, but when you translate it into the number of positions, it actually results in over 255,000 vacant positions; when we say long-term vacant positions, we mean they've been open for more than four months, so this is a serious issue. When we ask the percent of firms with long-term vacancies, we see that more than one firm in four is actually dealing with this issue going forward.
The next chart looks at it broken out by sector. You can see that in manufacturing the vacancy rate is growing fairly quickly, but it is still not as significant as what we see in many other sectors facing this issue in the economy.