Pandemic economic pain not evenly spread
Photo: Freepik | Bro
The impact of the pandemic is the top challenge hindering Canada’s economic growth but the economic pain is not evenly shared among business organizations, found a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada) released Sept. 22.
Fifty two per cent of respondents cited the pandemic fall out as their top economic challenge. However, the findings of the latest CPA Canada Business Monitor (Q3 2020) also revealed that not all businesses are feeling the pain. While the majority of professional accountants in leadership positions surveyed (58 per cent) reported decreased revenues for their organizations since the start of the pandemic, 20 per cent also reported unchanged revenues while 21 per cent reported increased revenues.
Optimism about economy has declined sharply
Optimism among the survey participants regarding the Canadian economy sits at 17 per cent versus those expressing a pessimistic viewpoint (46 per cent). A further 36 per cent is taking a "wait-and-see" neutral approach, says CPA Canada.
Despite the economic uncertainty, survey participants are feeling somewhat optimistic about the fortunes for their own organization over the coming 12 months. Forty-six per cent of those surveyed are optimistic about the prospects for their business, which is similar to what was reported in CPA Canada's last, pre-COVID Business Monitor in Q4 2019. Only 17 per cent report pessimism about their organization's prospects with a cautious 37 per cent feeling neutral.
Layoffs and reduced hours
In response to the pandemic, 40 per cent of respondents stated their organization has temporarily laid off employees and 32 per cent have temporarily reduced hours. Twenty per cent have hired permanent employees, while 26 per cent laid off employees permanently.
The survey indicates that the Canada Emergency Wage Subsidy (CEWS) is popular among organizations with fifty-five per cent of survey participants applying for it and another five per cent planning to do so. “Ten per cent of businesses that applied for CEWS support state their business would not have survived without it and a further 82 per cent claim they likely would have survived but the subsidy helped them avoid taking difficult steps such as layoffs,” says CPA Canada.
Despite the current challenges, over the next year, 47 per cent of respondents are predicting their businesses will see increased revenues, 43 per cent are foreseeing increased profits and 28 per cent anticipate an increase in employee numbers.