The ongoing rollout of vaccines and easing of the pandemic second wave lifted business confidence in B.C.
The latest Business Barometer readings from the Canadian Federation of Independent Business pointed to the strongest 12-month outlook since late-2018, while short-term confidence also rose to a five-month high.
B.C.’s headline index rose to 63 points, up from 61.7 in January and 56.4 a year ago.
Nationally, the index came in at 62.5 points. As the index is measured on a scale of zero to 100, a value above 50 suggests that the number of businesses expecting stronger activity outnumbers those expecting a worse performance.
While uneven, B.C.’s index has trended higher since June, amid the combination of easing restrictions, government supports, economic recovery and, most recently, vaccine deployment.
However, uncertainties regarding case counts and potential for further rounds of closures undoubtedly weighed against increased optimism.
It should also be noted that businesses are generally not in a better position than they were before the pandemic, but goalposts of success have changed, while some businesses have already shuttered for good. Short-term expectations rose to the highest level since September but fears of a third wave likely weighs on sentiment.
Current assessments of business health also slightly improved from January, with 32% of firms surveyed stating good business health and 24% noting conditions were bad. This likely reflects industry factors as hospitality and tourism sectors remain under pressure.
Full-time hiring plans were roughly balanced, with 17% looking to add staff while 18% looked to cut staff over the coming three months.
The outlook remains contingent on the pandemic evolution and vaccine deployment.
Negative risks remain a third wave of the pandemic and the spread of new variants, which could pause or partially rollback the recovery.
That said, ongoing measures such as physical distancing and health-related restrictions should allow the economy to improve with vaccine deployment supporting medium-to-longer-term growth. •
Bryan Yu is chief economist at Central 1 Credit Union.
