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CAN'T FIND SOMETHING? |
Business in Vancouver November 18-25, 2008; issue 995 Local businesses grapple with economic downturn Outlook for hiring, sales and profit increasingly grim, but layoffs have thus far not been a significant factor, BIV-Ipsos survey respondents say Andrew Petrozzi North America’s ongoing economic crisis is top of mind for Vancouver business leaders, but, according to the most recent BIV-Ipsos survey, its full impact on employment has yet to be felt. While 97% of survey respondents have been closely following the worsening economic situation – with 56% following it “very closely” – just 49% indicated it has had a somewhat or very significant impact on their companies. According to the survey, the financial crisis has had the most significant impact on future employee hiring plans (43%), company sales and profit (43%). More than a quarter of respondents said they had suffered a somewhat significant impact in both categories. Steve Mossop, president, western region, North America for Ipsos, said the silver lining in the responses is that layoffs have been the area least affected by the economy. According to the survey, employee compensation has been significantly affected (39%): 26% of respondents said workplace compensation has suffered a somewhat significant hit. However, just 15% of respondents said the situation had a significant impact on layoffs; 61% said it had little or no impact. From a financial perspective, 31% said the crisis had a significant impact on their businesses’ ability to secure capital; 30% indicated it had a significant impact on company debt and financing. Discretionary spending has also taken a hit. Company holiday parties (31%), corporate gifts to consumers/clients (30%) and corporate donations to charity (28%) have all suffered significantly. “It’s unfortunate that those areas get impacted, especially the charities side,” Mossop said. “We can live without the office parties, but the charitable giving looks like it’s going to have a dent in it.” Respondents’ outlooks for the B.C., Canadian and U.S. economies over the next six months were uniformly grim: •just 12% believe the B.C. economy will improve; •45% feel it will worsen; •41% think it will stay about the same; •only 10% think the Canadian economy will improve; •54% indicated it would get worse; and •37% think it will stay about the same. The outlook for the U.S. economy is even more dire. Just 9% of respondents think it will improve; 61% believe it will worsen over the next six months. Respondents’ were more optimistic about the financial situation of their own enterprises over the next six months: 23% believed it would improve; 22% said it would worsen; 51% said it would stay about the same. “They are seeing death and destruction all around them, but when they look at their own company they think maybe they can weather through this with minimal layoffs, sit it out and maybe it will not impact them as dramatically as the rest of the world,” said Mossop. “That’s always a good sign for recovery.” As for potential solutions, government bailouts of financial institutions were opposed by 40% of respondents and supported by 41%. The remainder neither supported nor opposed bailouts. Mossop said there’s a lot of skepticism over whether bailouts are the right strategy and that it would remain a contentious issue for governments to deal with. As to investment system changes needed to avoid a similar economic crisis in the future, most respondents said more regulatory oversight of financial institutions is needed. Greed, political interference and a need for more stringent regulatory oversight in the United States also figured prominently. Many respondents said the issue was an American problem and said Canada should therefore reduce its trade reliance on the U.S. and eliminate or increase regulation of stock options and short selling. • apetrozzi@biv.com |
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