While there have been many positive indicators recently that the Alberta economy is shifting to growth, small business owners in the province aren’t breaking open the champagne.
In fact, small business confidence levels in Alberta continue to fall, according to a recent survey.
The latest Business Barometer index, released on Thursday by the Canadian Federation of Independent Business, said confidence in October decreased 1.7 points to 53.1, putting it 7.4 points below the national average (60.5) and the lowest in the country.
The index is measured on a scale between zero and 100 and an overall index level between 65 and 75 normally indicates that the economy is growing at its potential and a majority of owners expect their business’s performance to be stronger in the next year, said the CFIB.
“Small business confidence has dipped a bit this month,” said Amber Ruddy, director of provincial affairs for CFIB in Alberta. “Many seem to suggest that tough times are behind us, but business owners clearly still have apprehensions about the current state of affairs.”
The barometer also showed:
- the percentage of business owners looking to increase full-time employment positions went up by two points compared to last month, reaching 11 per cent; however, those looking to cut back on positions went up by six points compared to last month, to sit at 24 per cent;
- 23 per cent of business owners in Alberta describe their company as being in good health while 54 per cent say its satisfactory and 23 per cent say its bad;
- the provincial numbers for October were: Prince Edward Island (70.8), Quebec (66.2), Ontario (64.2), New Brunswick (62.3), Manitoba (62.2), British Columbia (61.5), Nova Scotia (60.7), Newfoundland and Labrador (53.8), Saskatchewan (53.2) and Alberta (53.1).
Omar Abdelrahman, economist with TD Economics, said the 0.9 point decline nationally was the second consecutive monthly decline but still leaves the index above its year-ago levels and puts it in line with recent trends.
“Nevertheless, the index remains below its pre-oil-shock averages, and below the 65 to 70 range cited by CFIB as the gauge for small business confidence in an economy operating at its potential,” he said.
“Small business confidence has been moving sideways throughout the year, with the index mostly hovering at decent levels above 60. With this index showing bouts of volatility, not too much emphasis should be placed on one month of data. The subdued performance trend of resource-heavy provinces throughout the year, however, is likely a factor contributing to the index not recovering to its pre-oil-shock levels. While the uptick in natural resources confidence and last year’s pickup in global oil prices is a cause for optimism, currently depressed Canadian heavy oil prices and elevated differentials may cap any strong spikes in confidence within some of these provinces.”
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.
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