Sixty one per cent of entrepreneurs identify rising wage costs as a major constraint
CALGARY – After reaching its highest level in two and a half years in October, Alberta’s small business confidence dropped by one point in November to 73.6, according to the latest Business Barometer survey results released today by the Canadian Federation of Independent Business (CFIB).
“Small business confidence settled back a bit in November, but still registered some of the best results of the year, with Alberta still being one of the most positive operating environments in the country. Having said that, the Achilles heel continues to be labour shortages and rising wage costs,” says Richard Truscott, Alberta Director for CFIB.
When entrepreneurs were invited to characterize the general health of their business, 55 per cent said it was “good”, up five points from October, while 9 per cent described it as “bad”, up one point.
In terms of the most significant limitations on their sales and production, 53 per cent of the business owners surveyed in November said it was the shortage of skilled labour, up a single point from October. Management skills and time constraints was next at 39 per cent, followed by the shortage of people for lower-skilled jobs at 35 per cent.
When asked to identify the biggest cost constraints for their business, 61 per cent of entrepreneurs said wage costs, 14 points higher than any other issue, such as taxes, fuel and energy, or insurance.
Hiring expectations also remained strong. Thirty-one per cent of entrepreneurs in November said they planned to add full-time staff over the next three months, down one point over the previous month, while nine per cent expected a reduction, up one point.
Nationally, the Business Barometer index dropped 1.9 points in November to 65.9. The provincial indices from best to worst were: British Columbia (73.9), Alberta (73.6), Newfoundland (67.7), Ontario (65.7), Saskatchewan (63.4), Manitoba (63.8), New Brunswick (61.9), Nova Scotia (59.9), PEI (59.0), and Quebec (58.9).
About the Business Barometer: Measured on a scale between 0 and 100, an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. An index level of between 65 and 75 means the economy is growing at its potential. The November 2014 findings are based on 982 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.1 per cent 19 times in 20. More details about the Business Barometer are available at http://www.cfib.ca.
About CFIB: As Canada’s largest association of small and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, including 10,000 in Alberta, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.