Yu: B. C. small business confidence rises but growth outlook remains weak
'Subdued' business growth Photo: Unsplash Employment in accommodation and food services in B. C. continued to grow in May. B. C. small business confidence improved in July, although the near-term outlook. . .
'Subdued' business growthPhoto: UnsplashEmployment in accommodation and food services in B. C. continued to grow in May. B. C. small business confidence improved in July, although the near-term outlook continued to point to subdued growth for the province’s small- and medium-sized businesses. According to the Canadian Federation of Independent Business’s Business Barometer, the province’s 12-month outlook index rose to 52. 5, up from 48. 4 in June, moving back above the 50-point threshold but still pointing to shallow economic activity. The three-month outlook also rose to 45. 6, up from 43. 3 in June, but remained contractionary. The two measures suggest B. C. firms remain relatively pessimistic and continue to anticipate weak sales and operating conditions in coming months. By comparison, the national reading saw the 12-month index rise to 58. 3 and the three-month index to 57. The survey was done before the United States threatened to impose 50 per cent tariffs on selected Canadian goods, which will likely push confidence lower in August. Broadly, business constraints eased on several fronts. Weak demand remained the leading limit but was cited by fewer firms, (48 per cent versus 51 per cent in June), while skilled-labour shortages (37 per cent) and working-capital limits (24 per cent) also edged lower. Cost pressures stayed elevated, led by tax and regulatory costs (68 per cent), wages (65 per cent) and fuel (62 per cent). Fuel cost pressure eased somewhat as the U. S. -Iran ceasefire pulled oil prices lower through June, but the decline may prove temporary. Despite softer demand and easing financing constraints, high operating costs continued to squeeze margins. Net hiring intentions held steady but remained negative with 11 per cent of firms looking to add full-time staff, while 19 per cent looked to cut. On the employment front, May payroll counts in B. C. rose 0. 2 per cent (+4,800 positions) month-over-month and 0. 5 per cent (+12,600) year-over-year, according to Statistics Canada's Survey of Employment, Payroll and Hours. B. C. tracked close to national momentum, which posted growth of 0. 6 per cent year over year rise but growth remains shallow. Excluding unclassified businesses, payroll counts in the goods-producing sector edged down 0. 6 per cent (-2,400) year over year in May. Forestry, logging and support was the main drag owing to weak sector conditions as payroll counts fell 7. 3 per cent (-1,100) year over year. Mining, quarrying and oil and gas extraction dropped following months of growth, with payrolls down 1. 4 per cent (-405 positions) month over month and well below 2025 levels at 6. 5 per cent (-2,000) year over year. That decline partly reflected an elevated year-ago base, an effect that may persist into June. Meanwhile, the service sector continued its mild recovery, rising 1. 1 per cent (+23,000) year over year. Growth was again supported by management of companies and enterprises, up nine per cent (+1,400) year over year and health care and social assistance, up 3. 3 per cent (+12,000) year over year. The health care momentum aligned with the national trend. Accommodation and food services payroll counts rose four per cent year over year in May, a gain that may ave reflected preparations for the FIFA World Cup games in Vancouver. Whether that strength carried into June remains to be seen, as the Labour Force Survey did not show a comparable increase. Average weekly earnings increased 0. 6 per cent month over month to $1,354. 67 and were up 4. 6 per cent year over year, continuing to sit above the national average of $1,337. 77 (+3. 4 per cent year over year). With B. C. ’s headline inflation at 2. 9 per cent in May, that translates into real wage gains of roughly 1. 7 per cent year over year, providing a tailwind for household purchasing power. B. C. 's job vacancy rate dropped to 3. 1 per cent in May, still above the national rate of 2. 8 per cent. Bryan Yu is chief economist at Central 1. This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.