BC’s Large Firms See Better Economic Conditions And Changes To The World Of Work Ahead
BRITISH COLUMBIA – Decision-makers from British Columbia’s largest and leading businesses anticipate faster sales growth and plan to increase investment over the next 12 months according to the Business Council of British Columbia’s second BC Business Confidence Survey.
Firms also anticipate a slight improvement in overall economic conditions in the province over the next 12 months. However, this optimism comes despite, rather than because of, provincial government policy settings as a growing majority of firms lack confidence in the government’s current policy direction.
Firms were also canvassed on plans for the future of work once the pandemic subsides, including work from home models. Respondents anticipate a significant reduction in remote work from pandemic levels, but the majority expect to implement a permanent hybrid model of 1-3 days of off-site work for employees who can do their jobs remotely. This is likely to have some impact on the commercial real estate market in urban centres with a majority of firms anticipating they will need similar or somewhat less physical space to operate after the pandemic ends.
“As the local economy recovers, thanks in part to global and U.S. economic rebound and continued stimulus funding by governments here and around the world, major employers surveyed have plans to expand investment in British Columbia. However, government policy decision-makers must be alive to the various challenges faced by businesses and align policies with the goals of attracting new investment, enabling innovation and supporting productivity growth which leads to higher wages. By fostering and supporting strong per capita economic growth, and not hindering or throwing sand in the economy’s gears, government will be well positioned to generate the tax revenues that underpin BC’s generous social safety net and help British Columbians pay down record levels of public and private debt,” said Greg D’Avignon, President and CEO of the Business Council of BC.
Highlights of economic expectations:
- Respondents indicated widespread plans to increase investment in British Columbia and Canada over the coming 12 months with 78 per cent of firms expecting a slight or significant increase in their investment activity nationally, a jump from a reported 51 per cent anticipated increase reported in the December 2020 survey. A similar proportion of firms plan to increase their investment activity in British Columbia over the next 12 months.
- Nearly 40 per cent of respondents expect faster sales volume growth over the next 12 months compared to the previous 12 months, more than double those who expect slower sales growth (16 per cent). This is a significant boost from the last survey which found just 24 per cent of firms expected faster sales growth, which was on par with those who expected slower sales growth (26 per cent).
- With respect to hiring in British Columbia, 41 per cent expect a slight increase in FTEs, while 35 per cent expect their FTEs to remain the same. Encouragingly, fewer firms expect a decrease in FTEs compared to the previous survey in December 2020.
- Around three-quarters of respondents expect overall economic conditions in the province to improve over the next 12 months, however expectations are tepid with 67 per cent describing conditions as likely to be “slightly better”. Only 10 per cent of respondents expect things to be slightly or much worse over the next 12 months. This is a positive shift from the December survey which showed 50 per cent of respondents expecting much, or slightly better economic conditions and 36 per cent expecting slightly or much worse economic conditions over the next 12 months.
- BC business leaders expressed deteriorating confidence that the current policy settings of the provincial government will help their businesses succeed over the next 12 months. Two-in-five said they are “somewhat unconfident”, and one-in-five said they were “very unconfident” about provincial policies. Meanwhile, less than one-in-five said they were “somewhat confident”, and no firms indicated they were “very confident”.
- The survey also gathered the decision-makers’ insights into the major business challenges they anticipate facing over the next five years. The top five are: talent shortages at current wage levels; policy or regulatory uncertainty; adapting to changes in technology or business models; taxation; and physical capacity constraints including equipment and space limitations.
- When asked to rank the most sought-after skills employers are looking for among their employees over the next five years, respondents prioritized the following: higher cognitive skills, technology skills; social and emotional skills; basic cognitive skills; and physical and manual skills.
The Business Council of British Columbia will be releasing an in-depth look at emerging hybrid work models and the implications for employers, government revenues, employee retention and development, and demand for real estate.