Small business confidence in British Columbia dipped in January, consistent with patterns across the country but at a less pronounced pace.
The short-term three-month index fell 0.4 points to 44.8 points while the 12-month outlook fell 3.9 points to 59.8. The index is measured on a zero-to-100 scale, and a reading over 50 points means the majority of small and medium-sized companies expect business performance to be stronger in the coming year.
While the short-term outlook has now fallen for five consecutive months, the rate of decline decelerated. B.C. has faced stiff short-term headwinds not only from the pandemic health measures, but also from recent floods and fires. That said, health restrictions have been mild compared with those in provinces such as Ontario and Quebec.
Year over year, the long-term index fell 1.9 points while the short-term index remains 8.1 points higher than a year ago and relatively firm. Many businesses have accepted that the short-term outlook will be quite choppy but are more confident that economic and social activity will rebound following the current wave. Unlike other provinces, B.C. has not faced long periods of strict public health restrictions, so average capacity use rates have remained stable. In January this rate came in at 73 per cent, only three per cent lower than last month.
International tourism flows continued to recover through November, but remained well below pre-pandemic levels. The total number of non-resident travellers entering through B.C. reached 198,703 on a seasonally adjusted basis, almost five times greater than the same month in 2020, but still only 27.9 per cent of the number in November 2019. The influx of U.S. travellers since the reopening of the Canadian border to fully vaccinated U.S. residents continued to lead the overall travel increase. There were 156,276 American travellers entering B.C. in November, but this represented just 29.6 per cent of November 2019 levels. Total travellers from other countries doubled from the previous month to 42,427 persons. This was almost four times higher than November 2020 levels and marked a pandemic-era high. It was, however, still well below the pre-pandemic level, accounting for only 23 per cent of travellers in November 2019.•
Bryan Yu is chief economist at Central 1 Credit Union.
