Small business optimism increased slightly in Alberta in November.
But it remains well below the national average, according to the latest Business Barometer Index released on Thursday by the Canadian Federation of Independent Business.
Th index for Alberta increased less than one point (0.7) this month to 53.8, 7.4 points under the national average of 61.2.
The index is measured on a scale from zero to 100 and a score above 50 means owners expecting their business’s performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential, said the CFIB.
“Business confidence remains subdued and the general state of business continues to underperform compared to other regions of the country,” said Amber Ruddy, director of provincial affairs in Alberta for CFIB. “In all other provinces, there is optimism with the current state of business affairs but unfortunately that is not the case in Alberta.
“Governments should play a role in creating the conditions for local businesses to thrive. As municipal officials set their budgets, business owners urge them to keep the economic realities of running a small business in mind.”
The CFIB survey found that 25 per cent of business owners in Alberta say their firm is in good health, 52 per cent describe it as satisfactory, and 23 per cent describe it as bad.
It also found that 21 per cent are looking to cut back on full-time positions, which is down three points from last month, and 10 per cent are looking to hire, which is also down one point from October.
“Fifty-two per cent of businesses list insufficient domestic demand as the top limitation on sales and production growth. In terms of major cost constraints, the top three concerns are: tax, regulatory costs (78 per cent), fuel and energy costs (69 per cent) and wage pressures (64 per cent),” said the CFIB.
Nationally, 42 per cent of owners report that their business is in good shape this month, compared to 11 per cent who say they are in bad shape. Hiring intentions are back to normal seasonal levels, with 18 per cent who plan to hire additional full-time staff in the next few months versus 14 per cent who plan to cut back, explained the CFIB.
The provincial breakdown is: Prince Edward Island (69.2), New Brunswick (67.2), British Columbia (63.1), Ontario (62.1), Manitoba (61.3), Quebec (60.9), Nova Scotia (55.1), Alberta (53.8), Newfoundland & Labrador (51.8) and Saskatchewan (49.4).
“Business confidence hasn’t grown as would be expected compared to the current GDP growth,” said Ted Mallett, CFIB’s vice-president and chief economist. “Most provinces, however, are showing lower confidence levels compared to last month. Even Quebec, which reached record high confidence levels in September, plummeted below the national average.”
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