Alberta’s entrepreneurs have the fall blues. The monthly Business Barometer by the Canadian Federation of Independent Business showed small business confidence tumbled in November.
The index fell 8.9 points from the previous month to 44.7. It’s the second lowest in the country and well behind the national average of 56.1 per cent. The CFIB says an index between 65 and 75 is an indication of a strong economy.
“The significant drop in November indicates small businesses are not optimistic about the economy and have uncertainty regarding economic policies such as, natural resource market access and trade relations,” said Annie Dormuth, the CFIB’s Alberta Provincial Affairs Director.
But the CFIB said preliminary results from its post-budget survey — completed after the Alberta government revealed its first budget — indicate 66 per cent of business owners are confident the budget will improve Alberta’s economy.
CFIB said Alberta’s small business small owners’ intentions to hire over the next three months weakened further in November. Ten per cent of business owners say they plan to increase their full-time employment (up one percentage point from October), compared to 31 per cent who anticipate a decrease (up 10 percentage points from October).
Annie Dormuth
In other provinces, the index is: Prince Edward Island (75.0), New Brunswick (70.2), Quebec (67.4), Nova Scotia (62.7), Manitoba (59.8), Ontario (58.3), Newfoundland & Labrador (54.8), British Columbia (52.3), Alberta (44.7) and Saskatchewan (44.1).
“In Alberta, despite the decline, the level of the barometer remained above levels seen in 2015/2016. The same could not be said for Saskatchewan, where the index dropped to an all-time low,” said Rishi Sondhi, Economist with TD Economics, in a commentary note.
“From an industry perspective, nine out of 13 sectors recorded declines, with natural resources reporting the largest drop (-8.2 pts). Conversely, the biggest increase in optimism was in professional, scientific and technical services (+4.0 pts to an elevated level of 66.1).”
Sondhi said confidence took a hit in November, with the barometer registering a weak reading and the share of firms noting their business situation as “bad” rising significantly.
“This is concerning, as confidence had remained resilient for most of the year. That said, optimism is generally holding up outside of the Prairies, despite external risks and soft domestic conditions,” said Sondhi.
“Small business confidence declined significantly in Alberta and Saskatchewan, with firms expressing major concerns about the ability of domestic demand to sustain activity.”
Sondhi said more than half of respondents in Saskatchewan cited insufficient domestic demand as a limiting factor for sales, while in Alberta, the share was even higher. About 70 per cent of respondents in Alberta and Saskatchewan cited taxes and regulations as causing difficulties for their businesses, well above the national figure.
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