Provincial index falls more than 4 points; first major decline in eight months
Calgary, July 27, 2017 – Alberta’s small business confidence index suffered its first major setback after eight months of increasing or holding steady, according to the latest monthly Business Barometer® index published by the Canadian Federation of Independent Business (CFIB). Small business confidence in Alberta dropped 4.3 points in July to 57.3.
“Entrepreneurs are likely reassessing the outlook for their business largely based on ongoing weaknesses in market demand for their products and services, especially in the resource and retail sectors,” said Richard Truscott, Vice-President, Alberta and BC. “But the Alberta government certainly hasn’t been helping matters thanks to their aggressive economic policy agenda that has resulted in new taxes, more employment rules, and higher labour costs for small and medium-sized businesses,” added Truscott.
Almost two-thirds (64 per cent) of Alberta businesses cite insufficient domestic demand as their main limitation on sales or production growth, more than 40 points higher than any other factor. The major cost constraints for Alberta entrepreneurs are: tax and regulatory costs (72 per cent), followed by wage costs (61 per cent) and fuel and energy costs (59 per cent).
Twenty per cent of business owners report their firms are in good shape, down one point from June, while 25 per cent say their operations are in bad shape, up one point. Short-term employment plans remain negative with 18 per cent of Alberta businesses intending to reduce full time staffing positions in the next three months, down 2 points from June, while only 11 per cent are looking to increase staffing levels, down 3 points.
The national small business confidence index dipped slightly in July to 60.7 points. The other provincial numbers were: PEI (73.8), Manitoba (68.9), Quebec (68.9), Nova Scotia (66.9), British Columbia (65.9), New Brunswick (63.9), Ontario (59.5), Newfoundland & Labrador (51.8), and Saskatchewan (50.0).
Measured on a scale of 0 and 100, an index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing at its potential.
July 2017 findings are based on 710 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through July 18. Findings are statistically 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, including 10,000 in Alberta.