Alberta Small Business Confidence Rebounds Six Points

Confidence levels still below lowest point experienced in 2008 recession 

Calgary – Alberta small business confidence gained six points in May to 34.6 according to the Business Barometer index published monthly by the Canadian Federation of Independent Business (CFIB).  The Alberta results are still approximately 24 points below the national average of 58.2, 10 points below any other province, and several points below the lowest mark from the 2008 recession.

“Only time will tell if this is the start of a longer-term trend.  Although it looks like entrepreneurs had a bit more of a bounce in their step in May, we are far from sunny days and sunny ways.  There’s still a long hill to climb,” said Richard Truscott, CFIB’s Vice-President, Alberta and BC.

Despite the small rebound in the overall outlook, 39 percent of small businesses in Alberta still describe the general health of their business as ‘bad’, down three points from April.  Only 19 per cent characterize it as ‘good’, up four points from the previous month.  Small business hiring plans remain negative, with 33 per cent of owners expecting to cut back and only 8 per cent looking to hire.

Tax and regulatory costs are a major cost constraint for 65 per cent of businesses, up one point from the previous month.  Lack of market demand is also identified by 65 per cent of business owners as their biggest challenge, 45 points higher than any other factor.

“Layering on a new carbon tax scheme is definitely not going to instill confidence among job creators.  Moving the small business tax rate down one point would have been a much stronger move if it wasn’t tied to a big tax hike right across the economy,” said Truscott.

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.  Normally, the economy is growing at its potential when the index level of between 65 and 75.

The national Business Barometer index is 58.2.  The provincial numbers were: PEI (75.0), British Columbia (67.1), Ontario (65.8), Nova Scotia (63.9), Quebec (60.4), Manitoba (57.7), New Brunswick (57.0), Saskatchewan (51.5) and Newfoundland & Labrador (44.6).

The May 2016 findings are based on 684 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey.  Data reflect responses received through May 16.  Findings are considered accurate to +\- 3.7 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.