Bank of Canada: Significant portion of businesses optimistic about post-COVID-19 recovery

A significant fraction of Canadian business tenants are expecting their revenues to bounce back to pre-pandemic levels within 12 months, according to a recent survey by the Bank of Canada.

However, the study – conducted from May 12 to June 5 – emphasized that such a recovery would be largely contingent upon the federal government’s next steps.

“Firms’ expectations of a return in sales to pre-pandemic levels often depend on the lifting of government-mandated restrictions,” the BoC said. “About 40% of businesses reported that they anticipate their sales will fully recover by next year or that their sales were not negatively affected by the pandemic.”

These particular respondents have been faring relatively well in terms of labour, the central bank said in the study.

“This set of firms also expect the size of their workforce to be near pre-pandemic levels in one year. These firms generally did not report recent staff layoffs or declines in their past sales,” the BoC said.

Despite these flashes of optimism, roughly 10% of retail tenants are still likely to permanently close their businesses, Colliers International said in a report earlier this month. As much as 74% said that they are considering new strategies, with 41% contemplating exclusively online operations.

“We expect the trend around permanent closures to increase given the slow recovery in consumer demand and limitations created by physical distancing,” said Jane Domenico, senior vice president at Colliers Canada.