CPABC Business Outlook Survey reveals housing prices and cost of living are the primary reasons why BC businesses can’t attract and retain employees
Each year, CPABC conducts the Business Outlook Survey to measure members’ perceptions of the current and future economic climates in BC, in Canada, and globally. The survey also asks members to share their thoughts on the challenges for business success and the performance of government in supporting BC businesses. Responses are analyzed by region, and a year-to-year comparison is made. Newly added to the process this year was the analysis of results from members in executive management roles (the “C-suite”). A summary of the 2015 survey results follows.
Economic outlook – in BC, in Canada, and globally
Survey respondents were optimistic about BC’s economy in 2015 (as they were in 2014), with 42% rating it as “good” or “excellent.” Interestingly, respondents residing in the Mainland/Southwest (56%) and Vancouver Island (54%) Development Regions were more likely to have negative feelings about the BC economy than members living in more rural regions of the province (47%).
Only one-fifth of respondents described Canada’s economy as “good,” and one-third said they believe BC’s economy will grow faster than the Canadian average over the next two years. Still, the percentages of those expecting improvement for BC and Canada over the next two years are close, at 25% and 24%, respectively. The two-year forecast for international markets was mixed—43% of respondents said they expect the US economy to improve, 41% expect the Asian economy to improve, and 25% expect the European economy to improve.
C-suite members were more likely to hold positive views about the BC (51%) and US (59%) economies, and to expect improvement, at 29% and 54%, respectively.
Challenges to business success
As was the case in 2014, the ability to attract and retain high-calibre employees and/or skilled labour was ranked as the number one challenge to business success in BC, with nearly 73% of 2015 respondents identifying it as an issue. Ranked next in terms of importance were the ability to raise capital (62%), consumer confidence levels (also 62%), and government red tape (61%).
Among those who saw recruitment and retention as BC’s biggest challenge to business success, the high cost of living in BC, low wages, and high housing costs were cited as the top contributing factors. Not surprisingly, respondents living in the Mainland/Southwest Development Region were more likely to cite the cost of living and the cost of housing as the primary challenges to businesses when it comes to retaining skilled labour.
Consistent with past years’ results, respondents identified housing prices (78%), commodity prices (74%), the value of the Canadian versus US dollar (72%), and the Canadian economic climate (69%) as the top economic challenges to business success in BC. Respondents in the Mainland/Southwest, once again, were more likely to rate housing prices (83%) as an obstacle, and also cited the foreign ownership of properties (57%) and the slowing of China’s economy (68%) as issues. C-suite members identified the same economic issues as the membership in general, but were more likely to list the return to the PST/loss of input tax credits as an issue (58%).
Government’s support of business
On October 22, the government launched a consultation with British Columbians in order to reduce red tape and improve service delivery.
Overall, opinions about the government’s performance in creating a good climate for business and investment in BC were not high. The provincial government rated the highest in the 2015 survey, at 37% (rated good or excellent). The Federal government followed at 33%, and municipal government came in at 26%.
When asked how the BC government could improve the provincial economy, respondents identified the following as top priorities: improving regional economic development, reducing government red tape, and increasing municipal fiscal responsibility. C-suite respondents said the provincial government could stimulate economic growth and reduce the barriers to business success in BC by leveraging investment in technology, harmonizing taxes, and providing more financial support in the form of grants, incentives, SRED claims, or tax credits.
When asked about the province’s tax rates, nearly half (47%) of respondents indicated that an increase in the provincial tax rate would affect their company’s or their clients’ business investment plans. Moreover, nearly one-third indicated that their organizations had already put investment plans on hold, mainly due to economic concerns.
Looking to the future, more than half (52%) of respondents said they expect their business performance to stay the same over the next two years, and two out of five members said they anticipate expansion. C-suite members were more likely to expect expansion, at 51%.
About the CPABC Business Outlook Survey
The CPABC Business Outlook Survey was conducted between July 27 and August 9, 2015, as a self-administered online survey. A total of 3,569 CPABC members completed the survey, resulting in a 15% response rate. The maximum margin of error was +/- 1.9%, 19 times out of 20. The survey was managed by NRG Research Group, an external market research supplier. Of those members who completed the survey, most reside in the Mainland/Southwest Development Region (61%). The remainder are from the Vancouver Island/Coast (14%) and Thompson/Okanagan (7%) Development Regions, or from outside of BC (13%).
Nearly half of all survey respondents work in industry (47%), with manufacturing (15%), finance and insurance (10%), mining (8%), and construction (7%) being the most common business sectors. Approximately one-third (28%) work in public practice, and one-quarter work in other sectors.
One in five survey respondents hold senior management roles within their organization, and nearly half (47%) work for an organization with more than 50 employees.
To review the results in further detail, you can access the 2015 CPABC Business Outlook Survey report online at bccpa.ca, under the News, Events & Publications tab.