Half of entrepreneurs’ list wage costs as a major constraint: $15 minimum wage will exacerbate the problem
CALGARY – The Canadian Federation of Independent Business (CFIB) released the latest Business Barometer index today that shows Alberta’s small business outlook dropped 1.3 points in May to 45.7. CFIB’s national Business Barometer® Index remained virtually unchanged from last month, creeping up only a tenth of a point to a 60.6.
Businesses in the resource sector remain the least optimistic in the country, but those in manufacturing, retail and financial services are also underperforming against the national index.
“The fallout from the shift in the energy sector continues to have small business owners in a holding pattern. Alberta’s new government must send the right signals to independent business that the entrepreneurial spirit will be protected and championed,” said Amber Ruddy, CFIB’s Senior Policy Analyst.
Nineteen per cent of business owners in Alberta plan to add full-time staff over the next few months, versus 17 per cent who expect to cut back. There has also been a serious decline in the general state of business health in 2015 with only 35 per cent saying their firms are in good shape, down 20 points compared to the end of last year.
“Cabinet needs to make sure to take stock of the state of small business as they plan their agenda,” said Ruddy. ‘Hiring intentions are as low as they have been since recovering in 2010 from the recession. Crafting government policies that help, not hinder, entrepreneurs must be the top priority. That is why the government must rethink its $15 minimum wage pledge.”
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. An index level between 65 and 75 is a sign the economy is growing at its potential.
The May 2015 findings are based on 890 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through May 17. Findings are considered accurate to +\- 3.3 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.