December 15, 2020 (Vancouver, B.C.) – A survey of senior decision makers from British Columbia’s largest and leading companies reveals expectations for a positive, but tepid, economic recovery over the remainder of 2020 and through 2021.
The Business Council of British Columbia’s inaugural B.C. Business Confidence Survey canvassed 50 major employers from industries across the province. The survey provides insights into expectations for sales growth, hiring and investment over the next 12 months, as well as policy priorities for creating better conditions for business growth and job creation. Respondents were sampled broadly in accordance with the industrial composition of B.C.’s business sector GDP.
- On balance, firms expect sales growth to continue at a similar rate for the next 12 months as compared to the past 12 months. About 46% of firms expect unchanged sales growth, whilst 26% expect faster sales growth and 28% expect slower sales growth.
- Firms plan to increase investment spending in Canada over the next 12 months, on balance. However, there is not much enthusiasm as a majority of respondents expect spending will increase only slightly (34%) or remain about the same (22%) as over the past 12 months.
- Similarly, firms plan to increase their employment levels in B.C. over the next 12 months, on balance. However, this appears to be a tepid signal – 34% of firms expect staff levels to be only slightly higher and 28% expect them to remain the same.
Large firms, that are characteristic of the membership of the Business Council, are responsible for 45% of all private sector employment in the province. Survey responses include employers from across the B.C. economy except for public administration and other services industries.
Uncertainty for individuals, households and businesses has tempered sales growth and investment plans in many sectors throughout the pandemic. While British Columbia has seen a partial and welcome recovery in employment in the second half of 2020, a much more robust recovery in private sector activity than is indicated by the survey results will be needed in 2021 to repair the damage wrought by COVID-19. Governments must assess their agenda to create the conditions that attract the private sector capital investment necessary for a job-rich recovery and to broaden and expand the province’s tax base.
Other key results:
- On balance, firms expect the B.C. economy to improve over the next 12 months. Around two-thirds of firms expect the economy to be much better (12%), slightly better (38%), or to remain about the same (14%). Conversely, other firms expect the economy to be slightly worse (20%) or much worse (16%).
- A majority of firms (56%) are not confident that current provincial economic policy settings will help their business succeed over the next 12 months, with 26% of firms saying they are somewhat unconfident and 30% saying they are very unconfident. Only 2% of firms said they are very confident.
Survey respondents’ top three economic policy priorities for the B.C. government going forward are:
- Improve overall conditions for private sector investment and hiring,
- Advance transport infrastructure projects (e.g., investments in trade-enabling infrastructure),
- Make regulatory processes simpler and more efficient.
“Policy decision makers would be wise to pay attention to regulatory barriers to investment in our province and promote policies that will make our province a top tier place to host capital in light of increased competition for global investment, including ESG capital,” said Greg D’Avignon, President and CEO of the Business Council of British Columbia. “While we have scope to leverage agri-tech, life sciences, low carbon intensity exports and transportation as growth opportunities that create jobs, British Columbia’s economy will continue to rely on major capital investments which accounted for more than two-thirds of our 2.7% GDP growth in 2019.”
The survey also found that British Columbia businesses have been active in corporate social responsibility and the adoption of ESG (Environment – Social – Governance) principles. Nearly all (90%) responding firms had incorporated or intended to integrate ESG practices into their business operations, planning and reporting. More can be done, however on reporting, with roughly half of firms publicly reporting their ESG results and activities and another 11% planning to do so.
Next year, the Business Council will be hosting a series of virtual forums and will produce several publications on the global trends driving ESG, why ESG is important to growing firm value and how B.C. companies can leverage or expand their ESG practices to attract investment and procurement opportunities.
The survey results offer further support for the ideas expressed by the Business Council recommendations in its report, Stronger Tomorrow, Starting Today: An Economic Plan for BC Families and Businesses released in late July. These recommendations were developed through input from major employers, post-secondary institutions, and community and iindigenous leaders. The report includes proposals such as creating more efficient and digital regulatory model, expanding day care, and modernizing and streamlining our tax structure to help foster private sector investment and jobs in B.C.
The first biennial B.C. Business Confidence survey was conducted online between November 3rd and December 1st, 2020. The sample includes responses from decision makers at 50 of B.C.’s largest and leading companies with firms selected broadly in accordance with the composition of B.C.’s business sector GDP.
About the Business Council of British Columbia
Now in its 55th year as the premier business organization in British Columbia, the Business Council of B.C. is a non-partisan organization made up of over 200 leading and largest companies, post-secondary institutions and industry organizations from across B.C.'s diverse economy. The Council produces exceptional public policy research and advocacy in support of creating a competitive economy for the benefit of all British Columbians.