Full recovery more than two years away: survey
A majority of Canadian corporate directors believe it will take more than two years for the economy to fully recover from the disruption caused by the COVID-19 pandemic, but many are more optimistic about their own firms' prospects, according to a survey conducted by the Institute of Corporate Directors late last year.
The report, which was provided to the Financial Post, found that while only 13 per cent of directors thought the overall economy would recovery by the end of 2021, nearly half (47 per cent) believed their own firms would bounce back within that time frame.
Rahul Bhardwaj, chief executive of the ICD, said he thinks the more optimist outlook for individual firms comes from board members being satisfied that their earliest concerns about the pandemic — liquidity and operational strategy including how to maintain worker safety and supply chains — have been addressed by the companies.
Economic recovery, on the other hand, carries more uncertainty, not least of which is how industries hardest hit by the pandemic such as travel, tourism and hospitality will fare, and the knock-on effects on other sectors.
Other unknowns include the number of businesses that will keep employees working from home or other remote locations, and the impact that will have on segments of the economy including commercial real estate.
“There's far more uncertainty with the economy writ large,” said Bhardwaj, adding that directors are keeping an eye on a variety of factors over which they have little to no control. “As trust starts to build, I think you're going to see more optimism around the economy.”
He said that despite ongoing lockdowns, glimmers have emerged in the new year, including upticks in consumer sentiment and manufacturing.
Still, the outlook observed in the ICD report isn't far from what economists are predicting.
“The economy will be close to its prior trend for the level of output, making up both the decline and the missed growth, and close to full employment, by early 2023,” said Avery Shenfeld, chief economist of CIBC Capital Markets, on Tuesday.
“Overall, we're confident that there is a lot of pent-up demand, and saved incomes, waiting to be unleashed once the economy gets the shot in the arm it needs, from a literal shot in our arms.”
Shenfeld said his projections anticipate a successful rollout of vaccines and efficacy that meets expectations.