Alberta Small Business Confidence on Four Month Streak of Canadian Record Lows

Alberta Small Business Confidence on Four Month Streak of Canadian Record Lows

Calgary – Alberta small business confidence fell 0.2 points in March to 26.5 on the Business Barometer index published monthly by the Canadian Federation of Independent Business (CFIB). The index registered consecutive historic lows in Alberta for the entire first quarter of 2016. Confidence remains 10 points below 2008 recessionary lows, and about 40 points below the level associated with a healthy economy.

“The impact of the current economic downturn is having prolonged negative effects on sales and growth. The top business limitation reported by entrepreneurs is insufficient demand for products and services. Many consumers have less disposable income and seem to be making more cautious and deliberate purchasing decisions,” said Amber Ruddy, CFIB’s Director of Provincial Affairs for Alberta.

Sixty-nine per cent of entrepreneurs list insufficient domestic demand as the top limitation for their business, the same as previous month. Small business hiring plans are relatively unchanged in March with 34 per cent of owners saying they will reduce their full-time workforce, down one point from February. Thirteen per cent say they intend to hire, up three points from the previous month.

On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. Normally, the economy is growing at its potential when the index level of between 65 and 75.

“As the provincial budget approaches, entrepreneurs expect the Notley Government will ease up on their detrimental economic agenda. Now is not the time to impose risky new policy experiments on our fragile economy,” said Ruddy.

Sixty-three per cent of small businesses in Alberta cite tax and regulatory costs as a major cost constraint, down five points from February. “Signals from the Premier that small business taxes are being cut in the April budget is a sensible first step toward recovery,” said Ruddy.

The national Business Barometer index is 52.3. The provincial numbers were: Nova Scotia (65.8), Quebec (65.0), British Columbia (62.5), PEI (59.1), Ontario (57.0), Manitoba (54.8), New Brunswick (53.2), Newfoundland & Labrador (47.1), and Saskatchewan (47.0).

March, 2016 findings are based on 699 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through March 21. Findings are considered accurate to +\- 3.7 per cent 19 times in 20.

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.