It was a slow week in the world of provincial economic data, with the release of only a couple of significant indicators.
On the small-business front, British Columbia confidence levels continued to improve in May to extend the strong performance going back to late 2013. The Canadian Federation of Independent Business (CFIB)Business Barometer Index (BBI) surged to 74.1 points, up 2.2 points from April. While there are some seasonal effects, the BBI was nine points higher than a year ago, and the highest in the country. The BBI for Canada was 67.1 points. A reading above 50 means the number of business owners expecting a stronger business performance over the next year outnumbers those expecting a weaker one.
Optimism has climbed to the highest level since before the recession, and dovetails with positive year-over-year gains in economic indicators including retail, exports, tourism and housing, as well as a lower Canadian dollar. While some of these indicators have shown slower growth of late, businesses are likely reacting to a stronger operating environment relative to past years. In addition, a positive flow of news could be adding wind to the sails, including LNG optimism and growth in the creative economy led by announcements of significant expansions in Vancouver by Microsoft and Amazon. Momentum in the latter sector has increased since the most recent CFIB survey with the announcement that Sony Pictures Imageworks will relocate its Culver City, California, operations to Vancouver and expand them.
While confidence could ease in coming months given decelerated first-quarter growth in the U.S. and Canadian economies, as well as some slowdown in B.C. economic indicators, a moderately positive growth outlook should maintain confidence going forward.
This is good news for the hiring environment. According to the CFIB survey, 30% of businesses surveyed planned to add full-time staff in the next three months. Central 1 Credit Union expects employment growth to reach about 1% this year, marking a subdued performance but an improvement over 2013. •
