B.C.’s large firms see better economic conditions and changes to the world of work ahead

August 31, 2021 (Vancouver, B.C.) – 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 B.C. 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.

Highlights of economic expectations:

• Respondents indicated widespread plans to increase investment in British Columbia and Canada over the coming 12 months with 78% of firms expecting a slight or significant increase in their investment activity nationally, a jump from a reported 51% 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% 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%). This is a significant boost from the last survey which found just 24% of firms expected faster sales growth, which was on par with those who expected slower sales growth (26%).
• With respect to hiring in British Columbia, 41% expect a slight increase in FTEs, while 35% 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% describing conditions as likely to be "slightly better". Only 10% 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% of respondents expecting much, or slightly better economic conditions and 36% expecting slightly or much worse economic conditions over the next 12 months.
• B.C. 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.

Quotes

“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 B.C.’s generous social safety net and help British Columbians pay down record levels of public and private debt.” Greg D’Avignon, President and CEO, Business Council of British Columbia.

“As the B.C. Business Confidence Survey confirms, large employers are anticipating further changes in the post-pandemic workplace and intend to implement hybrid work-from-home policies. At the same time, large employers are facing significant challenges in attracting high-skilled labour or “talent” at current wage levels that will enable business growth. Governments, post-secondary institutions and businesses must work together on policies and strategies that train, attract and retain a workforce that will meet the B.C. economy’s future skill needs.” David Williams, Vice President, Policy, Business Council of British Columbia.

Next week, 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.

About the survey

The Business Council’s B.C. Business Confidence survey examines the views of senior-decision-makers at around 50 large and leading companies operating in the province. The companies are major employers and are sampled in accordance with the industrial composition of B.C.’s business sector gross domestic product (GDP). The latest survey was conducted from June 14 to July 20, 2021 and included 49 responses. The survey asks about firms’ outlook for: sales growth, investment and hiring decisions; the overall B.C. economy over the next 12 months; policy priorities for the provincial government; and the future of work following the COVID-19 pandemic. This is BCBC’s second survey. The previous survey was conducted between November 3 and December 1, 2020 and included 50 responses.

Download the full report here.

About the Business Council of British Columbia

Now in its 56th 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 companies, post-secondary institutions and industry associations from across B.C.'s diversified economy. The Council produces exceptional public policy research and advocacy in support of creating a competitive, productive economy for the benefit of all British Columbians.

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Media Contacts:
Cheryl Muir
604-812-5965
cheryl.muir@bcbc.com