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Survey: B.C. business leaders show 'deteriorating confidence' in province's economic policy

BCBC survey did show some significant positives in other aspects of the economy, including sales, investment and employment.
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None of the survey respondents said they are “very confident” in provincial economic policy helping their economic situation. | Jamey Ekins, Shutterstock

While B.C.’s top businesses expect to boost investment activity in the next year due to an anticipated improvement to the economy, they also show “deteriorating confidence” in provincial policy on the matter.

That is the key finding of the latest BC Business Confidence Survey, released by the Business Council of British Columbia this morning. The survey – which polled 49 senior-level decision-makers at top companies in the province from June 14 to July 20 – showed a “growing majority of firms lack confidence in the provincial government’s policy direction.”

According to the data, the percentage of business leaders saying they are “somewhat unconfident” in the province’s economic policies grew from just above 20% in the last survey (conducted in Q4 2020) to 40% this summer. The percentage of leaders who said they are neutral on provincial policies’ likely effects also grew slightly, from just below 20% to just above 20%.

At the same time, the number of business leaders who said they are “somewhat confident” and – interestingly – “very unconfident” both declined. But the most telling sign from the survey about the business community’s overall mood on provincial policy may be the fact that none of the respondents said they are “very confident” in provincial economic policy helping their economic situation.

That same skepticism can be seen in the survey’s responses to the question of the biggest challenges facing each company’s sales volume over the next five years. Among the top five answers, four – labour shortage at current wages(14.3%), policy/regulatory uncertainty(14%), taxation (9.7%) and space/equipment-driven capacity constraints (9.1%) – relate heavily to provincial policy.

In a statement, Business Council of British Columbia president/CEO Greg D’Avignon called any provincial policy not conducive to fostering businesses and their investments “throwing sand in the economy's gears,” adding that it is key for B.C.’s government to “be alive to the various challenges faced by businesses.”

That way, D’Avignon said, the province can then support the business community in generating revenue – which in turn means tax revenue for the province that would go towards paying down “record levels of public and private debt.”

The new survey did show some significant positives in other aspects of the economy. Overall, B.C. business leaders expect faster sales growth over the next 12 months, with the percentage of respondents stating as much increasing from about 20% in the last survey to just under 40% in the current one. In turn, the percentage of respondents who said they expect slower sales fell from just below 30% to just below 20%.

The survey also showed a big boost in overall expectations for the B.C. economy in the next 12 months, with just under 70% of respondents now expecting “slightly better” economic conditions in the province over the next year, up from 40% in the last survey. The percentage of respondents who said they expected the B.C. economy to be “slightly worse” or “much worse,” meanwhile, both slid below 10% from around 20% previously.

In response to an expected pick-up in sales and the economy, B.C. business leaders responding to the survey added they are now more likely to increase investment spending – with about 80% saying they expect to significantly or slightly increase activities on that front. Respondents also said they are more likely to hire – although only slightly.

The full survey results can be seen at https://bcbc.com/reports-and-research.