(The Canadian Press)

(The Canadian Press)

Business outlook soft even before shock of COVID-19, Bank of Canada says

Over the last two weeks, more than two million people have applied for employment insurance benefits

The Bank of Canada says workers were feeling upbeat about job prospects, while employers felt otherwise in the weeks before COVID-19 delivered a shock to the Canadian economy.

The survey of consumer expectations suggests more people anticipated searching for a new job and expected they would quickly find something new, while fewer thought they would lose their jobs.

Household spending expectations continued to edge up faster than expectations for wage growth, which the bank says suggests consumers by mid-February weren’t becoming more cautious in their spending.

Then COVID-19 hit.

Over the last two weeks, more than two million people have applied for employment insurance benefits, a dramatic spike from what the program normally sees.

And starting today, Canadians who don’t qualify for EI will be able to apply for a new, $2,000-a-month emergency benefit the federal government expects to cost $24 billion.

The outlook for the rest of the year has seen an equally dramatic drop from just a few weeks ago, and the surveys from the Bank of Canada today provide a pre-pandemic picture of consumers and businesses.

Results from the business outlook survey suggest business sentiment had softened in most regions before the pandemic intensified.

Much of the business softness sentiment emanated from the country’s oil-producing regions where companies were generally less optimistic, pulling back on capital spending and hiring plans as they watched the price of oil fall.

Companies told the central bank they expected the economic shock from low oil prices to be worse than what hit the sector in 2015 and the 2008 economic crisis. As one data point, capital spending was being cut by 30 per cent compared with 2019.

The reason, the bank says, was over concerns that financing was becoming harder to come by for companies that were also anticipating “a bottoming-out in the sector rather than a negative shock.”

The survey also suggests oil companies foresaw few layoffs unless low oil prices persisted over a longer period.

The belief was the benchmark price for crude, known as West Texas Intermediate, would be between US$30 and US$35 a barrel. The price to start the week was closer to US$28 a barrel.

By mid-March, restaurants, hotels and other service industries had seen a collapse in sales, either closed or expected to soon, and were “drastically laying off staff or reducing staff hours in line with operations.” Others, the bank noted, were moving to food delivery and online sales to find new ways to earn money.

Manufacturers were anticipating temporary shutdowns and declining sales from challenged customers.

Grocery retailers and related transportation companies saw their sales reach “unprecedented levels” as workers were being told to stay at home.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Surrey RCMP Constable Mike Della-Paolera as seen in a cut-out used for the detachment’s Operation Double Take program. (File photo)
Surrey’s tall ‘Operation Double Take’ cop is on the move

Cut-out of Constable Mike Della-Paolera used in program to curb speeding and dangerous driving

In 2017, a member of the Disneyana Fan Club curated a small Community Treasures exhibit at the Museum of Surrey about the early days of Disney and the cartoonist Walt Disney. The museum is now accepting applications for its 2022 Community Treasures exhibition. (Photo: Submitted)
Museum of Surrey wants to spotlight local organizations and clubs

Museum now accepting applications for its 2022 Community Treasures exhibit

Musician Dana Vande is seen in a screenshot from a music video on Youtube. Vande recently released a pro-lockdown track in response to an Eric Clapton and Van Morrison anti-lockdown track.
Cloverdale musician writes pandemic response song to Van Morrison and Eric Clapton

Dana Vande answers a Clapton-Morrison anti-lockdown track with a pro-lockdown track

Family and friends of Hudson Brooks marched as part of a call for answers from an IIO investigation into his 2015 death. (Black Press Media files)
Inquest to look into RCMP shooting death of Hudson Brooks

Charges agains the RCMP officer who shot Brooks were stayed in 2019

Delta Police Constable Jason Martens and Dezi, a nine-year-old German Shepherd that recently retired after 10 years with Delta Police. (Photo submitted)
Delta Police dog retires on a high note after decade of service

Nine-year-old German Shepherd now fights over toys instead of chasing down bad guys

Provincial health officer Dr. Bonnie Henry prepares a daily update on the coronavirus pandemic, April 21, 2020. (B.C. Government)
B.C. adjusts COVID-19 vaccine rollout for delivery slowdown

Daily cases decline over weekend, 31 more deaths

(Realtor.ca)
Rent dropped to 2019 rates across parts of Metro Vancouver in December: Rentals.ca report

Rent costs have declined since May, a trend expected to continue due in part to the COVID pandemic

A female prisoner sent Langford police officers a thank-you card after she spent days in their custody. (Twitter/West Shore RCMP)
Woman gives Victoria-area jail 4.5-star review in handwritten card to police after arrest

‘We don’t often get thank you cards from people who stay with us, but this was sure nice to see’: RCMP

An elk got his antlers caught up in a zip line in Youbou over the weekend. (Conservation Officer Service Photo)
Elk rescued from zip line in Youbou on Vancouver Island

Officials urge people to manage items on their property that can hurt animals

A Trail man has a lucky tin for a keepsake after it saved him from a stabbing last week. File photo
Small tin in Kootenay man’s jacket pocket saved him from stabbing: RCMP

The man was uninjured thanks to a tin in his jacket

Tla-o-qui-aht First Nation Chantel Moore, 26, was fatally shot by a police officer during a wellness check in the early morning of June 4, 2020, in Edmundston, N.B. (Facebook)
Frustrated family denied access to B.C. Indigenous woman’s police shooting report

Independent investigation into B.C. woman’s fatal shooting in New Brunswick filed to Crown

Nurses collect samples from a patient in a COVID suspect room in the COVID-19 intensive care unit at St. Paul’s hospital in downtown Vancouver, Tuesday, April 21, 2020. (THE CANADIAN PRESS/Jonathan Hayward)
5 British Columbians under 20 years old battled COVID-19 in ICU in recent weeks

Overall hospitalizations have fallen but young people battling the virus in hospital has increased

Canada released proposed regulations Jan. 2 for the fisheries minister to maintain Canada’s major fish stocks at sustainable levels and recover those at risk. (File photo)
New laws would cement DFO accountability to depleted fish stocks

Three B.C. salmon stocks first in line for priority attention under proposed regulations

Most Read