Alberta small business confidence is on the rise and no longer the lowest in the country.
The Canadian Federation of Independent Business latest monthly Business Barometer index shows a 7.7 point hike in small business confidence among Alberta’s entrepreneurs in May.
The Business Barometer index for Alberta is now at 51.8 points, continuing the upward index trend that has characterized Alberta’s small business confidence for the last four months. The index has increased 14.3 points in Alberta since January of this year, said the CFIB.
But the provincial index remains behind the national average (59.7) and is a long way from the 65 to 75 point range (on the 100 point scale) that signals a healthy and growing economy, added the organization.
“The series of positive policy directions coming from new government will definitely benefit a lot of small businesses in Alberta,” said Richard Truscott, CFIB vice-president for Alberta and B.C., in a news release.
“The fact the new government promised and is starting to deliver on killing the carbon tax, launching a major new red tape cutting initiative, and allowing more flexibility in employment rules has put a skip in the step of many small business owners. Hopefully, time will show this newfound optimism to be justified and the economy gets moving again.”
The provincial numbers for May were: Prince Edward Island (66.3), Quebec (64.7), Nova Scotia (64.4), Ontario (61.7), New Brunswick (54.7), British Columbia (53.1), Manitoba (52.3), Alberta (51.8), Newfoundland and Labrador (49.4), and Saskatchewan (49.1).
In Alberta, CFIB said hiring intentions are looking slightly better for small businesses over the next three months as 13 per cent of business owners are expecting their full-time employment levels to go up, representing a two-point increase from April’s results (11 per cent). The report said 64 per cent expect their full-time employment level to remain the same, and 23 per cent expect it to decrease (down six points from April).
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Omar Abdelrahman, an economist with TD Economics, said the three-point advance in the overall Canadian measure is the highest reading since November but the index still remains below its pre-2015 highs.
“This month’s uptick in small business confidence is encouraging, and joins a range of other economic indicators pointing to stronger momentum in the second quarter following what was likely a temporary soft patch in Q1. Of course, the usual caveat relating to the month-to-month volatility in the data remains, and it is important to remember that the index remains well below the pre-2015 levels cited by CFIB as being consistent with an economy operating at its potential,” he said in a commentary note.
“Resource-producing provinces and natural resource sectors continue to weigh down on the index’s overall performance. Alberta’s rebound from its January low is encouraging, and is consistent with a modest uptick in other indicators and improved pricing in the province’s oil benchmarks. That said, structural issues in the province’s energy sector and uncertainty around global oil prices mean that confidence is unlikely to see a return to its pre-2015 levels anytime soon, with the same holding true for Saskatchewan.”
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