Today we see uncertain economic forecasts all around the World. It becomes easy to fall into a depressed notion of a dark economic future just by following the latest in media of all types. Seems there are more negative predications than positive. However, recently Scotiabank reports 40% of small business owners are ‘very’ or ‘extremely’ optimistic about the future of their business, according to a report. How can this be when two-thirds of business report a worse current situation than before COVID 19. The report uncovered that most businesses are feeling more prepared, with 69% stating their business is better equipped to survive a second wave of the pandemic.
The Scotiabank New Path to Impact Report also found:
The number one priority for small business owners is to increase sales through additional channels over the next three months.
- 3 in 10 small businesses anticipate continued financial difficulties in the short term including reduced revenue, less work, reduced consumer spending, and slow overall growth.
- 63% of small business owners say they do not foresee the need for additional financing to continue their operation, with smaller firms being less likely to require more financing.
- Majority of small businesses (60%) experienced decreased sales and revenue since the pandemic first began, with two-thirds having taken advantage of relief programs to help sustain their business.
Most industries state they are better equipped to survive a second wave of the pandemic — however, this sentiment is lower in the Construction industry, where 55% of business owners are prepared versus 69% on average (all industries).
Based on household spending and business activity trends, Toronto-based Scotiabank says that its projections for domestic growth have “improved markedly from the forecasts made at the peak of the pandemic earlier this year.”
The resiliency of Canadian small business owners throughout the pandemic has been commendable. Whether they’ve pivoted to rely more on digital channels, taken advantage of relief programs or adjusted their business model to serve today’s market, they’ve had to get creative to find ways to survive,” says Jason Charlebois , Senior Vice President, Small Business, Scotiabank. “While we cannot predict how the next six months will unfold, now is the time to start focusing on the future, with cautious optimism. Charting a new path forward has to start with a plan, so seek advice early, use the resources available, and be ready to pivot – it’s the greatest chance of survival in a post-pandemic world.”
The Bank of Canada: Here’s the reality of the past Summer 2020 – Business Outlook Survey
Nearly half of all businesses reported an outright decline of their sales in the past 12 months because of the impacts from COVID‑19, low energy prices and associated elevated uncertainty. This is reflected in a large decrease in the indicator of past sales growth. As the effects from the pandemic continue, firms expect slower sales growth ahead. More than half of all businesses anticipate their total sales over the next 12 months will be lower compared with the past 12 months. These expectations are backed by a sharp deterioration in indicators of future sales. Now at a record-low level, future sales indicators are suggesting a notable decline in sales growth in the near term. Softer sales expectations are widespread across all regions and sectors, with firms often expressing a high degree of uncertainty about consumer behaviour and future demand. Weakness is most prevalent among firms in tourism-dependent, finance and real estate industries as well as those linked to commodities, particularly energy. However, many businesses expect the weakness in their sales to be temporary and not extend over the entire 12-month period ahead. Half of firms anticipate that their sales will mostly recover within the next year as pandemic-related impacts recede. Most of these businesses either reported a drop in their past sales or expect future sales to be lower, but not both.
What DOES the future hold for business?
The Conference Board of Canada: COVID-19 and uncertainty to flatten the curve of economic recovery.
Canada’s economy bounced back in recent months following the economic plunge sparked by the COVID-19-related shutdown in March and April. At its trough in April, real GDP was at 82 per cent of February’s (pre-COVID) level, 3 million Canadians were out of work (a 15.6 per cent decline in employment), and total hours worked had plummeted a staggering 28 per cent. Still a gaping chasm remains to be closed before Canada’s economy is back to normal.
A summary positive note…
- The World economy slowly starting to recover
- Ingenuity through inventions is at an all time high.
- The housing market is on fire
- Government subsidies are still available
