Small business confidence in Alberta fell again in August, the second month of decline after five consecutive months of increases, according to the latest Business Barometer released on Thursday by the Canadian Federation of Independent Business.
The Business Barometer dropped by 2.9 points to 54.3 points, which is the second lowest in the country, and puts the provincial index well behind the national indicator (60.6 points).
“It appears some of that hopeful optimism we saw building earlier this year has begun to wear off and it now looks as if sentiment is sliding backwards,” said Keyli Kosiorek, policy analyst for Alberta at the CFIB, in a news release.
“Alberta’s entrepreneurs are feeling the effects of a soft economy and continued economic instability. The provincial government must continue to focus on policies that support economic growth, job creation and small business if it wants to see further increases in confidence levels.”
The CFIB said Alberta’s barometer reading is well below the 65 to 75 point range (on a 100-point scale) that indicates the economy is healthy and growing at its potential.
It said intentions of small business owners to hire over the next three months have slightly worsened as 10 per cent say they plan to increase their full-time employment (down three points from July), compared to 22 per cent who anticipate a decrease (down two points from July).
Nationally, Canadian small business confidence improved by 2.8 points to 60.6 in August, after dipping 3.7 points to 57.8 in July. While this improvement moves the index to the second highest reading this year, it still remains below its pre-2015 levels.
The provincial numbers for August were: Quebec (67.7), Nova Scotia (67.2), Prince Edward Island (66.7), Manitoba (62.1), New Brunswick (61.3), Ontario (59.9), Saskatchewan (55.4), British Columbia (55.3), Alberta (54.3), and Newfoundland and Labrador (53.2).
“The uptick in small business confidence in August is encouraging, but should be interpreted with caution given the volatility of the index. Looking at its broader trend together with other recent data suggests that conditions in the Canadian economy are holding steady,” said Omar Abdelrahman, an economist with TD Economics, in a commentary note.
“This leaves the Bank of Canada in a relatively tough spot. It will have to consider how likely domestic conditions, such as stable inflation readings and healthy labour market indicators, are likely to evolve given the downside risks posed by elevated trade tensions and the moderation in global economic growth, factors which could weigh on exports and business investment in the months ahead.”
Mario Toneguzzi is a Troy Media business reporter based in Calgary.