Businesses plan to spend and hire workers this year — but not so much in high-touch industries
New data from the Bank of Canada show hiring intentions among businesses have hit an all-time high and workers’ confidence in landing a job has rebounded nearly to pre-pandemic levels.
The business outlook survey shows most businesses across the country and sectors plan to hire over the next 12 months as they foresee faster sales growth as restrictions loosen.
However, the survey notes that some businesses in high-contact service sectors like restaurants don’t expect a return to their pre-pandemic staffing levels for at least the next 12 months.
The central bank’s survey of consumer expectations says nearly half of respondents who lost hours or income because of the pandemic reported having a harder time finding work in their field now than a year ago.
As well, two-fifths of respondents to the consumer survey don’t expect a quick return to a normal work schedule.
The central bank suggests the improved business and consumer sentiments reflect the pace of vaccinations and economic reopening, but adds that the results also suggest an uneven path out of the pandemic for the country’s labour market.
The path for the economy is expected to get much rosier in the coming weeks and months, driven by strong expectations for consumer spending.
Households have on average amassed a mountain of savings during the pandemic as they had limited options to spend and government subsidies put a financial floor under the hardest-hit workers.
The number of businesses reporting improved indicators of future sales hit a record high in the quarterly survey, which the central bank suggested was another “concrete signal of a broad-based strengthening in demand relative to a year ago.”
Standing in the way of meeting those future demands are labour-related constraints, such as finding skilled or specialized workers that are likely to persist. The central bank also says there are some firms that worry about labour shortages limiting their ability to meet current demand.
The consumer expectations survey finds that respondents on average planned to spend just over one-third of their excess savings in the next 12 months, mostly on going out to restaurants and social activities that have been limited by lockdowns.
About 10 per cent of those funds are also slated to go for a down payment on a condominium or house as renters in particular plan on purchasing, owing to low interest rates, demand for more space, and expectations that prices are going to continue to rise.
The bank’s survey finds that four-fifths of respondents who worked from home during the pandemic expect to be able to continue to do so, which could put upward pressure on the housing market and depress demand for office space.