Following a positive trend from May through August 2021 that bucked the national trend, small business confidence in B.C. eased in September.
According to the latest Canadian Federation of Independent Business estimate, both the short-term (three-month) and long-term (12 month) outlooks continued to slide, marking two consecutive months of lower confidence. While the long-term outlook remains above 60 points (64.4 points), despite a 2.4-point slide month over month, the short-term outlook is below 50 points now (49.1 points) after losing an additional 5.8 points in September.
Measured on a scale between 0 and 100, an index above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance.
Uncertainty remains high in the short term for many businesses. The Delta wave is unsurprisingly a persistent concern, but firms are also navigating stronger inflationary pressures due in large part to supply chain issues, as well as increasing signs of labour shortages. The measure of job vacancy in B.C. is highest in the country.
The number of international arrivals to Canada continued to increase during August but remained a fraction of pre-pandemic levels. The number of non-resident travellers entering through B.C. reached a seasonally adjusted 77,441 persons, almost five times greater than the same month last year, yet only 10.8% of the number from August 2019. U.S. travellers, who could enter Canada for non-essential travel after full vaccination, effective August 9, provided most of the surge. There were 66,436 American travellers entering B.C. in August. That’s a fivefold increase from last year, but it remains a small portion (12.6%) of the August 2019 level. The number of overseas visitors also jumped from July, but at 11,005 visits this was 5.8% of August 2019 levels.
As a popular travel destination, B.C. can expect increased traveller inflows from the U.S. after a yearlong border closure. This would continue to boost the provincial tourism recovery in addition to intra- and interprovincial travel under easing restrictions. Meanwhile, increased vaccinations globally will lift overseas entries. •
Bryan Yu is chief economist at Central 1 Credit Union
