Calgary — For the first time in the two and a half years since ATB Financial has surveyed small and mid-sized enterprises (SMEs) for the ATB Business Beat, more believe their business will be worse off six months from now (33 per cent) than those who feel it will be better off (26 per cent). This time last year almost half (48 per cent) felt they would be better off in six months.
“It’s tough to see because Alberta entrepreneurs are eternal optimists,” says Wellington Holbrook, Executive Vice-President, ATB Business & Agriculture. “But more and more business owners are feeling the pinch of reduced revenues and have to make some tough decisions to manage through this downturn.”
As part of ATB’s quarterly Business Beat Survey, we ask SMEs two questions:
- How do you feel the economy will be six months from now?
- How do you feel your business will be six months from now?
To determine the ATB Economy and Business Indexes (shown below), we remove the neutral numbers – those that answered “the same” – and take the percentage who answered “better” (somewhat/much better) and subtract the percentage who answered “worse” (somewhat/much worse) and rescale the number to range between 0 to 100. When the line dips below 50, more SMEs feel pessimistic than optimistic.
The ATB Economy Index has been below the line since the end of 2014 and now, for the first time in the history of the Business Beat, the ATB Business Index has also dipped below the line. The slight bounce back on the ATB Economy Index last quarter was short-lived as oil prices continue to be volatile with more and more industry experts predicting a slow recovery.
“We’ll weather this storm as Alberta business owners are resilient,” adds Holbrook. “Right now they can take steps to manage through such as renegotiate payment terms with suppliers, find efficiencies in processes and reduce inventory. And if they have any questions, they should give their banker a call. We might be able to help.”
The complete ATB Business Beat survey results will be available next month. To subscribe to the Business Beat, visit ATB.com/BusinessBeat.