TORONTO, July 22, 2022 – While many service industries have suffered from the economic downturn of pandemic year 2020, the Canadian accounting industry has shown positive growth and emerged stronger from the post-pandemic economy. . According to a new study conducted by Statistics Canada, which cites Canadian Accountant as one of its benchmarks, 2021 revenues for most of the professional and administrative services industries analyzed exceeded pre-pandemic levels, including accounting services, preparation of tax returns, bookkeeping and payroll.
The Canadian accounting industry has proven remarkably resilient in the first year of the pandemic. While many industries posted steep declines in revenue, the accounting industry was one of only four out of 12 cited in the StatCan study to show positive growth. The accounting sector recorded a 2.6% increase in revenue for 2020, which was higher than engineering services but lagged behind software publishing and data processing industries.
The accounting services industry has shown modest and steady growth throughout the pandemic and post-pandemic economy. Click on the image to enlarge it. (IMAGE: STATISTICS CANADA)
As borders closed and Canadians stayed inside, the travel and reservations sector saw a 56.9% revenue loss in 2020, the worst performance of the professional and administrative services sectors. At the other end of the spectrum is the management, scientific and technical consulting services sector, which saw a slight decline of 2.4% in 2020 and rebounded to double digits in 2021.
According to StatCan, “Certain changing trends have likely helped the [accounting] industry progress through economic volatility, shifting tax deadlines and government support programs. Over time, this industry has expanded into non-traditional business lines, such as consulting and advisory services. Additionally, as the pandemic has forced changes in typical business models, many accountancy firms have adapted their methods of operation (working from home, virtual interactions, and cloud-based efficiency).
Accounting services industry shows steady growth post-pandemic
As the StatCan study notes, the Canadian economy has been beset by a number of post-pandemic trade hurdles, such as supply chain disruptions, labor shortages, skills and inflationary pressures. Despite these challenges, however, the accounting services industry posted revenue growth of 5.9% in 2021, the second-lowest growth of the 12 service industries studied by StatCan.
This suggests that growth has been slow in the accountancy profession after the pandemic. Only engineering services posted weaker growth, and even the travel services sector – plagued by multiple challenges – saw a higher revenue increase than accounting. Although the rebound is occurring at varying speeds and is still far from complete in some sectors, 2021 revenues for most of the professional and administrative services industries analyzed in the StatCan study exceeded pre-levels. the pandemic.
The accounting services sector posted the fourth largest revenue increase of the 12 sectors in terms of percentage change from pre-pandemic levels seen in 2019. As the study notes, “In general, accommodative monetary policy , a resurgence in non-residential investment and an economy-wide recovery helped some service industries surpass their pre-pandemic revenue levels in 2021.”
The accounting services sector posted the fourth highest growth from pre-pandemic levels of the 12 sectors analyzed in the study. Click on the image to enlarge it. (IMAGE: STATISTICS CANADA)
Economic challenges persist, however: “Technological and digital advancements are helping to alleviate some of these challenges, but price and labor pressures are priorities for many companies operating in the service sector. Although the accounting services sector has not seen the lucrative revenue growth of the software publishing and data processing industries, it has shown resilience in tough economic times and emerged post-pandemic with a steady, albeit weak, revenue growth.
Colin Ellis is editor of Canadian Accountant. Lily Moving Forward During the Pandemic: How Select Service Industries Rebounded in 2021by Marie-Christine Bernard, Vivian Lin, Shannon O’Brien and Marie-Élisabeth Pires.