Barometer index drops another 6.6 pts in February; down 25 points since November
CALGARY – The Canadian Federation of Independent Business (CFIB) released the latest Business Barometer survey results that show Alberta’s small business confidence index fell another 6.6 points in February to 48.2. It is the third straight month of significant declines, leaving the barometer more than 25 points lower than November.
“Alberta’s confidence levels are the lowest in the country and quickly approaching the recessionary levels from early 2009. This sharp decline is clearly linked to the hits being taken in the energy sector due to the decline in oil prices. Many small businesses are no longer taking a ‘wait and see’ approach, they are making adjustments in their businesses now,” remarked Amber Ruddy, Senior Policy Analyst for CFIB.
Hiring expectations are also down. Only 20 per cent of business owners surveyed in February said they planned to add full-time staff over the next three months, six lower points lower than January, and 11 points down from December. Seventeen per cent of entrepreneurs in February expected a reduction in their workforce, same as the previous month.
Despite the sharp drop in hiring expectations over the past two months, 39 per cent of business owners still identified the shortage of skilled workers as a significant constraint on sales or production growth, down only two points from January.
“Skilled workers are essential to the operations of many small businesses in both good times and bad. So despite the weakening of hiring intentions, small businesses are still in search of skilled employees to help them weather this storm”, stated Ruddy.
Interestingly, entrepreneurs still have a relatively positive view of the general health of their own business. Forty-seven per cent in February said it was “good”, down just one point from points January. Only 5 per cent described it as “bad”, up one point.
“As the Alberta government seeks input on the upcoming budget, these numbers clearly show now is not the time to increase taxes. Doing so could send small business and the economy into a serious tailspin”, warned Ruddy.
Nationally, the index dropped about 4.4 points in February to 59.1. Looking across the country, after several years at the bottom of the pack, PEI (72.4) is now home to Canada’s most optimistic entrepreneurs, followed British Columbia (69.1), Nova Scotia (67.7), New Brunswick (64.8), Ontario (60.0), Quebec (58.5), Newfoundland & Lab (56.2), Manitoba (54.5), and Saskatchewan (53.0).
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 February 2015 findings are based on 964 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.2 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.