B.C. small businesses are feeling the pinch of a slower economic environment and are feeling cautious about the future.
According to the latest Canadian Federation of Independent Business monthly Business Barometer, small-business confidence eroded in most Canadian provinces in November. B.C. was no different with a drop to 52.3 points in November, down from 52.8 points in October and from 63 points a year ago. A value above 50 means that on net, the number of businesses with a positive outlook for the year ahead outnumbered those with a negative assessment. The latest reading was in line with recent months, but the lowest since mid-2009. Comparatively, national sentiment came in at 56.1 points.
Eroding confidence in B.C. is likely owing to a sluggish retail trends and weaker commodity sector. Businesses are still citing shortages of skilled labour, rising wages and taxation as impediments to business. One trend worth watching is hiring plans. Firms looking to increase full-time staffing declined to 16%, while those looking to cut rose to 18%, marking the first time since 2012 that net employment plans turned negative. This could translate into softer hiring. B.C.’s labour market showed mixed signals in September, according to Statistics Canada’s latest Survey of Employment, Payrolls and Hours (SEPH). Non-farm payroll employment was essentially unchanged from August at about 2.36 million persons, which compared with a mild slip nationally at 0.2%. Nevertheless, year-over-year growth at 2.2% remained moderately strong and above the national performance.
Resource-sector malaise continued, while the high-tech sector boom, strong tourism and a rising population were positive drivers.
Forestry, logging and support employment fell 3.3% from August, and 12.6% from a year ago, while mining employment also pulled back. Retail trade employment fell 0.5% from August, with year-over-year growth a weak 0.6%.
In contrast, stronger performances continued among professional, scientific and technical services (which includes the high-growth technology sector), posting a 1.2% increase from August and a 6% year-over-year gain.
Education, health care/social assistance, and accommodation/food services also posted stronger hiring with growth near 5% over the past 12 months.
Despite the latest flat payroll reading, wage inflation continued to pick up as the labour market remained tight. Average weekly earnings rose for the sixth time in seven months with a 0.6% increase from August to $1,009. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.