Confidence at B.C.’s small and medium-sized enterprises continued to rise through August as reopening activities buoyed sentiment, according to the latest Canadian Federation of Independent Business (CFIB) Business Barometer index.
B.C.’s economy remained in Step 3 of its restart plan through August, which largely normalized life for British Columbians and allowed for group gatherings at restaurants, ongoing returns to workplaces, fitness classes, large indoor and outdoor gatherings (with capacity restrictions) and other activities. Adding to the less stringent public health orders in B.C., factors were robust in domestic tourism and increased housing activity. The longer-term 12-month outlook improved to an index level of 71.9 points, up from 69.5 in July and 56.8 a year ago. A value above 50 means on net, the number of businesses surveyed expecting a stronger business environment exceeds the number expecting a weaker environment. This was highest among large provinces and exceeded the national reading of 67.1 points. The three-month outlook also improved with an index value of 58.4 points, which lagged behind only Quebec.
While index levels exceed pre-pandemic levels, this is partly due to an economy still operating below capacity. The CFIB reported that 79% of its members were fully open, but only 47% experienced staffing and revenue levels that were at or above normal.
On the hiring front, 28% of firms reported plans to increase full-time hiring over the coming three months, while 13% expected to cut staff. Aside from Quebec and much of Atlantic Canada, this marked the widest gap among provinces and points to positive hiring momentum.
That said, confidence can change rapidly. Like the broader globe, B.C. is grappling with the rapid rise in COVID-19 cases and spread of the highly transmissible Delta variant. Public health measures have been tightened, and it has been announced that vaccine passports will be required for non-essential services. It is likely that a move to a Step 4 reopening will be delayed until the fourth wave is wrestled down.
Non-farm payroll counts in B.C. rose by 1.1% from May or 24,463 positions, according to Statistics Canada’s Survey of Employment, Payrolls and Hours. This followed a 0.6% decline in May. June’s gain was consistent with Labour Force Survey employment growth of 1.6%. •
Bryan Yu is chief economist at Central 1 Credit Union.
