March 25, 2021 by Adam Malik
The size of your commercial client appears to influence their optimism about the future as Canada’s vaccination program starts to roll out, a trio of recent reports suggests.
Bigger commercial clients are feeling a sense of optimism when looking ahead, say two recent reports that spoke to medium, large and global companies.
A majority of respondents polled for a Scotiabank report believe they’ll be back to normal in six months — or less. Another from KPMG shows significant growth in confidence for the Canadian economy among Canadian CEOs.
However, a third study, focused on small business, paints a grimmer portrait: Twenty percent of respondents in the study reported being at risk of closing their doors by the end of the COVID-19 pandemic; that’s above and beyond those who have already gone under.
As many regions across the country move out of lockdowns, mid-to-large-sized Canadian businesses are looking forward to a post-COVID environment and a recovery, says the Scotiabank 2021 Canadian Business Outlook Report.
Nearly eight out of 10 (78%) of these bigger companies feel positive about the future of their company. Almost half (53%) anticipate that their business will change for the better in some manner.
Although still cautious about the future state of the economy, more than two-thirds (68%) of businesses polled in Scotiabank’s report believe they’ll be back to their pre-COVID-19 pandemic level in six or fewer months.
Eighty-one percent of respondents plan to make investments in their business over the next half-year. On what kinds of investments? Technological capabilities (53%) topped the list, followed by hiring more employees (45%).
Almost a quarter (23%) of businesses say they’re doing the same now as before the pandemic. The same percentage believes their company is doing better now than they were beforehand.
The state of the economy topped the list of concerns for businesses (40%). The fear of further pandemic-related government restrictions ranked close behind (39%).
For its Global CEO Outlook pulse survey, KPMG recently spoke to 500 chief executives from influential companies in 11 countries, including Canada. The executives’ confidence in the three-year growth prospects for Canada’s economy sits at 81%, up from less than half (48%) only six months ago.
Forty-three per cent of Canadian CEOs said the pandemic has “forever changed” their business. They’re reconsidering their organization’s physical footprint; almost half are open to flexible workplace options. Furthermore, nearly two-thirds said they’re building on their use of digital collaboration and communication tools.
However, the small business segment is still struggling. Mounting debt and mental burnout are hitting small business owners across the country, reported the Canadian Federation of Independent Business (CFIB).
Fewer than two-thirds (62%) of businesses are fully open one year after the pandemic was declared by the World Health Organization, CFIB data show. Not even half (44%) are fully staffed; fewer than a third (31%) are making normal sales.
One-fifth of all businesses could be lost by the pandemic’s end, CFIB numbers suggest. According to its report, One Year of COVID-19: Seven Ways the World Has Changed for Small Business, 58,000 businesses closed in 2020 and 181,000 are at risk of following suit.
“Many small businesses are no longer in business or are unsure of their future,” said CFIB president Dan Kelly. “CFIB itself has 15,000 fewer members as Canada enters a second year of the pandemic.”
Other concerns raised by CFIB’s report include delayed retirement, carrying too much debt, and mental stress.
Since many small business owners pin their retirement on the sale of their business, more than two-fifths (42%) of owners have held off their retirement because of the pandemic. More than half (55%) said the value of their business dropped thanks to months of pandemic-related restrictions.
As for debt, the CFIB reported that the average debt load of small businesses sits at $178,000. Three-quarters (76%) of respondents who have taken on debt believe it’ll be more than a year until they’re able to repay — 11% are worried they may never be able to repay it.
Almost half (48%) told the CFIB that they have suffered from mental health issues because of the COVID-19 pandemic. A similar percentage (46%) say they have had to work significantly longer hours.
Feature image by iStock.com/Eightshot Studio