Barometer index drops another 11.4 points; down 18.8 points since November
CALGARY, January 29, 2015 – According to the latest Business Barometer survey results released today by the Canadian Federation of Independent Business (CFIB), Alberta’s small business confidence index fell another 11.4 points in January to 54.8. The significant drop means confidence levels are at their lowest level since the 2009 recession, and represents one of the largest monthly declines ever recorded in Alberta.
“We have gone from having the most optimistic entrepreneurs in the country to the least in just two months. Clearly, big storm clouds are brewing in the minds of our province’s entrepreneurs, much of it obviously related to the recent drop in oil prices, ” remarked Richard Truscott, Alberta Director for CFIB.
Business owners understand how important the oil and gas industry is to Alberta. A CFIB survey in August 2014 revealed 89 per cent believed the health of the oil and gas sector was either very or somewhat important to the success of their business. Only 10 per cent of entrepreneurs said it was not important, and one percent didn’t know or were unsure.
Signs of softening, hiring expectations were also apparent in the new numbers. Twenty-six per cent of entrepreneurs in January said they planned to add full-time staff over the next three months, down five points from December, while 17 per cent expected a reduction in their workforce, up seven points.
“One silver lining in an otherwise dismal outlook among Alberta’s entrepreneurs is the relatively positive view they continue to hold in the health of their own businesses. It’s testament to the stabilizing effect of the small business sector in an otherwise volatile resource economy”, stated Truscott.
When asked to describe the general health of their business, 48 per cent in January said it was “good”, down six points from December, but still well above the national average. Only 8 per cent described it as “bad”, a one point dip, while the rest said it was the same as December.
“The absolute worst thing the Alberta government could do in these circumstances is siphon a bunch of money out of the economy through tax hikes in the next provincial budget”, warned Truscott.
Nationally, the index rose about a point and a half in January to 63.5, but only from relative optimism gains in three provinces. Rising sentiment was centred in PEI (69.8), Ontario (67.8), and Nova Scotia (64.9). Although optimism fell off everywhere else, the epicentre was in Alberta. Losses of between two and four points were also noted in Newfoundland (60.3), Manitoba (57.1) and Quebec (56.3), while sentiment was off only slightly in Saskatchewan (55.1), New Brunswick (64.1) and nation-leading British Columbia (71.7).
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 January 2015 findings are based on 1,094 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.0 per cent 19 times in 20. More details about the Business Barometer are available at 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.