The COVID pandemic has fundamentally changed the way businesses are prioritizing their investment spending.
Capital investment is one of the primary drivers of our economy – a dollar invested today usually means more productivity and new jobs tomorrow. But, when the pandemic arrived, it changed the way business looked at this expenditure line.
First of all, most businesses spent a month or two trying to figure out what the arrival of the COVID virus meant so they froze discretionary spending. But, as we moved through the pandemic, we began to get a flavor for what this would mean….some sectors had to increase their spending but many simply put it on hold.
The sector that cut back the most, perhaps not surprisingly, was accommodation and food services. Owners of those enterprises pulled back long-term investment to the tune of 40-percent. Those with rental properties were not far behind with a 30-percent cut, a sign that the quality of rental properties may decline over time.
But, there are some sectors that had to spend more. Health care and social assistance topped that list with an increase of 12-percent and administrative support saw similar increases.