BCBC is collaborating with other business organizations to survey how companies are managing through the COVID-19 crisis (see here). A first survey was conducted by the Mustel Group between March 26 and April 1. In this blog, we look at responses from BCBC members representing mostly large employers operating in B.C. across a range of industries. Around 55% of respondents have more than 500 staff and another 30% have 50-200 staff (Figure 1.1).
Figure 1.1: Most survey respondents are large employers (n=44)
Sales volumes over the past two weeks
Most large B.C. employers in our survey have seen significant declines in sales volumes over the past two weeks (Figure 1.2). About 45% of firms have lost up to one-quarter of their sales, another 30% of firms have seen one-quarter to three-quarters of their sales disappear, and roughly one-in-ten have seen more than 75% of their sales disappear.
Figure 1.2: Most large employers have seen significant declines in sales volumes
How are large employers responding?
Firms were asked about the impacts on their business over the past fortnight and what they expect over the next fortnight (Figure 1.3). Over the past two weeks, the most common impacts were decreased sales volumes, increased operating costs, and deferments and cancellations of capital projects, marketing projects and contracts or tenders. More than half of firms have ramped up their digital-based or e-commerce activities. However, this appears to be mostly a defensive strategy, as few firms have recently introduced new products or services, or issued new contracts or tenders. One-in-five large employers surveyed plan to close temporarily.
Looking ahead, more than half of large employers continue to plan to defer or cancel capital investments. This suggests the province may need to brace itself for sustained weakness in provincial GDP rather than a “v-shaped” post-pandemic economic recovery. Over 40% of firms expect to lay off staff and reduce staff hours over the next fortnight (note that the Canada Emergency Wage Subsidy (CEWS) was announced partway during the survey period).
Figure 1.3: Many of B.C.'s large employers plan to reduce capital investment and staffing
A future blog will look at how large employers are seeing the effectiveness of federal and provincial economic responses to the COVID-19 pandemic.