Vancouver small business could have it tough in 2023, report says

An economic outlook report from the Conference Board of Canada says 2023 could be a tough year for Vancouver businesses.

The outlook says softening consumer spending and sluggish demand will take a toll on small businesses. The board’s chief economist Pedro Antunes says small businesses that cater to the downtown core will be the ones to feel the slowdown the most.

“A lot of those businesses that cater to the downtown office worker, they’re just not seeing the numbers coming back and they’re not going to see the numbers because of you know, the ongoing remote work and hybrid work.”

Antunes says most government support for small businesses is coming to an end with a lot of businesses at the end of their ropes. However, he says there is some good news- tourism is starting to rebound and conditions should improve through 2024 as inflation hopefully starts to cool down.

“I think we have seen the economy do quite well on the tourism side,” Antunes said. “The cruise ships have come back to the port and that is going to continue into 2023. It’s going to still be a moderate or a modest performance relative to pre-pandemic times, but continued recovery.”

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The outlook also says new home constructions in Vancouver are down 12.6 per cent in 2023.

“There is going to definitely be a challenge nationally in terms of generating housing and housing demand in 2023, though, I think I’m pretty sure we’re gonna feel these pressures very soon. And for Vancouver, I think it’s doubly important because it’s such an attractive place for immigration.”

Antunes expects interest rates and inflation should ease by 2024 with real estate activity picking back up.

“Vancouver has always been a city that has strong demographic growth. You know, the tourism sector, hopefully, will fully regain its capacity. We’re doing well on the export side generally,
Antunes said. “But I think 2024, if all goes smoothly on the inflation front this year, 2024 will be a better year.”