Business confidence at B.C.’s small and medium-sized firms surged in March, according to the Canadian Federation of Independent Business (CFIB).
The monthly confidence index jumped 4.5 points to 67.5, which was similar to the national reading of 68.2 and third-highest among provinces, trailing only Ontario (72.8) and Nova Scotia (72.4). A value above 50 means firms are optimistic about business conditions over the next 12 months, which is consistent with stronger outlooks for both the Canadian and global economies.
That said, businesses are still downbeat about short-term prospects. While sentiment improved in B.C. to 45.9 points from 39.2 in February, this marks a net negative response, reflecting unknowns about the evolution of the pandemic, risks of a third wave on operations, and relatively slow vaccine deployment. Broadly, firms in sectors most affected by the pandemic, namely hospitality, private services and health/education are most pessimistic.
Other CFIB data points to improved hiring plans. About 18% of survey respondents planned to increase full-time employment over the next three months, with 14% planning to cut. However, with the recovery in the economy driving increased demand for labour, businesses will likely adjust by increasing hours for staff rather than by hiring.
B.C. population growth picked up in the fourth quarter after a pandemic-induced contraction in the previous quarter. Total population reached 5.15 million as of January 1, up 0.14% or 7,254 from October 1. This compared with a decline of 1,927 persons in the previous quarter and aligned more closely with a typical quarterly gain. Nevertheless, year-over-year growth remained soft at 0.4%.
The modest firming of population growth was driven by divergent patterns. Inflows of international immigrants reached 6,429 persons during the quarter, and while the 30% increase from the third quarter was stronger than normal, levels were down 45% from same-quarter 2019.
Given border restrictions, quarantines, economic weakness and broader uncertainties, new immigrants have likely delayed or cancelled moves to Canada during the pandemic. •
Bryan Yu is chief economist at Central 1 Credit Union.
