Small-business confidence in B.C. was positive in May despite effects of “circuit breaker” restrictions implemented during the COVID-19 pandemic’s third wave, according to the latest Business Barometer reading from the Canadian Federation of Independent Business.
The 12-month index came in at 68 points. While this was lower than April’s reading of 69.4, it far exceeded the demarcation level of 50. A value above this level means the number of businesses expecting better performance outnumbers those expecting a worse performance. B.C.’s reading was second only to Ontario’s.
The short-term outlook netted out positive for the first time since February 2020. A weaker short-term index trend compared with other provinces could reflect the fact that economic performance in B.C. has generally fared better than provincial peers over the past year while restrictions were more modest, meaning relatively less upside.
While divergent across industry lines, optimism is likely rising among firms as vaccinations continue to roll out quickly while third-wave restrictions are bearing fruit and lowering the pace of COVID-19 cases. Circuit-breaker restrictions were rolled back in late May, and with the province setting out the conditions for a further return to normal in coming months, the outlook continues to brighten amid strong global economic growth and a low-interest-rate environment. For the hardest-hit service sectors reliant on tourism and major events, the path to reopening is also in sight. Payroll employment counts in B.C. jumped in March, albeit preceding more restrictive third-wave measures and job losses. Based on employer data reflecting employees receiving benefits or wages, non-farm payrolls rose 1.2% or 26,754 positions. This was the strongest monthly gain since October and the first year-over-year increase since February 2020. The latter reflected base-year effects of the pandemic on payroll that began in March 2020. At 2.26 million positions, levels were still 4% below February 2020.
Hiring growth was broad-based. The retail sector drove nearly one-third of the March increase with growth of 2.9% (8,067 positions). Other key contributors included health care and social assistance (1.7% and or 4,926 positions), accommodations and food services (up 1.6% or 2,791 positions) and professional and scientific/technical services (up 1.5% or 2,117 positions). •
Bryan Yu is chief economist at Central 1 Credit Union.