Calgary — The latest ATB Financial Business Beat reveals how oil is still the straw that stirs the drink in this province.
“We asked Alberta business owners what impacts the success of their operations and the answer was oil,” says Wellington Holbrook, ATB’s Executive Vice-President, Business & Agriculture.
Of the 624 small and mid-sized businesses (SMEs) that participated in the quarterly survey, 70 per cent said the success of their business was tied to the price of oil.
“That’s significant because 90 per cent of Alberta’s small and mid sized businesses don’t deal directly in oil and gas,” adds Holbrook.
“But as our numbers suggest, they’re only a foot away.”
The Business Beat survey, conducted between January 16 and March 6, also showed 51 per cent of Alberta SMEs say the success of their business was tied to the value of the Canadian dollar, 60 per cent depend on the availability of skilled labour and 86 per cent need a strong provincial economy to be successful.
As we reported last month, the ATB Economy Index, which measures optimism in the Alberta economy, dropped to a low of 22.7, while the ATB Business Index, which measures business owners’ optimism in their own operations, scored 58.3. A score of over 50 suggests more respondents believe things will improve in the next six months. A score under 50 suggests more respondents feel things will get worse in the next six months.
Of the SMEs that believe their businesses will be worse off in six months, 36 per cent said the reason was the low price of oil.
“The majority of business owners are still optimistic about their own business’ future despite their dependency on oil,” adds Holbrook.
“It’s their resiliency and a ‘been there, done that’ attitude that I think is unique to this province.”
The ATB Financial Business Beat’s purpose is to gain an understanding of the challenges faced by Alberta’s small and mid sized business owners and to track confidence in the Alberta economy.
Businesses that qualify for the survey have less than 500 employees and bring in less than $20 million in annual revenue. Margin of error for the survey is plus or minus 3.9 per cent.