With a second wave of Covid-19 infections prompting renewed lockdown measures in various regions, recent research from Statistics Canada finds that most businesses are capable of withstanding the current tough economic conditions — for a few months, at least.
Based on a survey that was carried out between mid-September and late-October, the national statistical agency reported that 76.9% of businesses said that they have adequate liquid assets to continue operating. And, nearly as many (74.1%) don’t expect to change staffing levels over the next three months.
These projections were made amid already-significant revenue pressures.
At the time, 30.8% of businesses reported that their revenues were down at least 30%, year over year, StatsCan said. And, 15.5% said that revenues had dropped by at least 50%.
StatsCan reported that 36.4% didn’t expect their revenues to rise over the next three months.
Overall, just over 10% of businesses said that they expected their employee numbers to decline in the months ahead.
The proportion of companies expecting job reductions is notably higher in the arts, entertainment and recreation sectors (28.9%), and in the accommodation and food services sectors (22.5%).
While most businesses said they were not anticipating staffing reductions, the survey found that 30.4% said that they “did not know how long they could continue to operate at their current level of revenue and expenditures before considering further staffing actions, closure or bankruptcy,” StatsCan reported.
Close to one-fifth (17.5%) of companies said that they could continue for less than six months before adopting further cuts or closing, with approximately 29% in both the entertainment and accommodation and food services sectors reporting that they only have six months.
StatsCan also reported that 43.9% of businesses said that they are unable to take on more debt.
Again, conditions are notably tougher in the accommodation and food services sector, where 57.0% report being unable to take on more debt.