Widespread vaccinations, economic stabilization top reasons for renewed optimism, says economist
While the pall of shutdowns and widespread layoffs hung over B.C. business owners throughout much of 2020, new research from the Business Development Bank of Canada (BDC) reveals West Coast entrepreneurs expect to bounce back big this year.
“The mood is much better,” BDC chief economist Pierre Cleroux told BIV.
Business confidence in B.C. and the northern territories stands at +13 points, the highest among all regions after Quebec (+14), according to the BDC’s winter survey released on Monday (January 18).
Business confidence nationwide comes in at -1, up 34 percentage points from the BDC’s fall survey conducted in late September and early October.
Cleroux says the boost in confidence stems from the prospect of vaccines being in wide distribution by the end of the summer as well as the fact business owners have witnessed their economic circumstances stabilizing since the pandemic’s outset.
“That’s especially true in British Columbia, where the economy has rebounded the fastest in the country,” he said, adding some sectors are once again performing at their pre-pandemic levels.
“That’s the case of manufacturing – there’s actually more jobs in manufacturing in B.C. today than before the pandemic. That’s also the case in the mining sector, in technology. So I think that’s the third reason why people are more optimistic about 2021.”
But talent acquisition looks to be a challenge for the West Coast with 48% of business owners in B.C. and the northern territories forecasting difficulties hiring during the first quarter.
“A lot of small business was really hurt by the virus or by the slowdown in the economy so it’s a bit more difficult for them [to hire]. But there’s going to be jobs created mostly by midsize and large firms in the province,” Cleroux said.
Meanwhile, nationwide the BDC found that the number of businesses planning to invest more in assets for their companies (21%) is outstripped by those that plan to reduce spending (24%) in the coming year.
“We’re going to see a bit more investment from B.C. businesses, especially in technology, that’s the No. 1 place where businesses want to invest,” Cleroux said, referring to the survey results showing 53% of respondents with investment intentions plan to invest in non-tangible assets such as software and training compared with the 46% who plan to invest in machinery and equipment.
“Consumers are buying online, so businesses want to increase their presence. There’s more people working from home, so people are investing in technology to allow their employees to do that. And also businesses are investing in technology to be more productive to increase their efficiency and to reduce their costs.”
The BDC surveyed 1,001 business owners across Canada from December 3-18 as part of its latest research.