CPABC: B.C. investment and business activity takes a hit in 2020 due to COVID-19 pandemic
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VANCOUVER, British Columbia, Feb. 18, 2021 (GLOBE NEWSWIRE) -- According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, the number of active businesses in BC was down by 5.1 per cent in October 2020 compared to October 2019.
“When the COVID-19 pandemic first hit B.C., the ensuing business restrictions reduced active businesses by over 14,000 between March and May 2020,” said Lori Mathison, FCPA, FCGA, LLB, president and CEO of CPABC. “Thankfully, the situation improved over the summer and into the fall. However, the number of active businesses remained down by over 6,600 in October, and some industries are disproportionately affected.”
Unsurprisingly, service sector businesses that rely on human interaction were hardest hit by the COVID-19 pandemic. As of October 2020, the five industries experiencing the largest business disruption were: 1) Arts, entertainment and recreation (-10.3 per cent)2) Natural resource extraction (-8.6 per cent)3) Real estate, rental and leasing (-8.2 per cent)4) Accommodation and food services (-7.9 per cent)5) “Other services” such as personal and household (-6.7 per cent).
Investment into both residential and private non-residential projects also cooled, and despite recent price gains, housing starts steeply declined. The overall number of units started was down by nearly a fifth (-18.3 per cent) through 2020 compared to the number started in 2019. Attached units, such as condos and townhomes, accounted for the majority of the decline.
The economic climate also pushed private non-residential investment down to $5.0 billion in 2020, representing a 7.9 per cent decline compared to the level of investment in 2019.
“Economic uncertainty saw investors delay or cancel both residential and non-residential investment projects in 2020,” continued Lori Mathison. “Over 7,800 fewer residential housing units were started compared to 2019, and over $430 million less was invested in private non-residential developments. This is worrying as construction has been a large factor in the province’s robust economic growth. However, both attached and detached starts have rebounded from earlier in the year and major projects were up in 2020.”
B.C.’s inventory of major projects, those valued over $15,000,000, increased to $369.8 billion in Q3 2020, up 4.8 per cent compared to the same period last year. As of Q3 2020, nearly a third of the major projects are under construction, including the LNG Canada Facility ($36 billion) and the Coastal GasLink Pipeline Project ($6.2 billion).
“B.C.’s major projects, driven by natural resource and infrastructure projects, provide thousands of both direct and indirect jobs and are spread across every region in the province. With employment and GDP expected to remain below pre-crisis levels in 2021, these projects will meaningfully increase economic growth and help pay down the large provincial debt incurred to support businesses and citizens through the pandemic,” concluded Mathison.
To learn more, see www.bccheckup.com.
About CPA British ColumbiaThe Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 37,000 CPA members and 5,500 CPA students and candidates. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.
For more information: Vivian Tse, Manager, Communications 604.488.2647 firstname.lastname@example.org
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