Record 40 per cent of AB entrepreneurs may resort to layoffs within next 3 months
Calgary, October 2016 – Alberta small business confidence dropped five and a half points in October to 41.5 according to the monthly Business Barometer® index published by the Canadian Federation of Independent Business (CFIB). This figure again approaches the lowest low experienced during the 2008-2009 recession.
Staffing intentions worsened with 40 per cent of Alberta businesses saying they may enact full-time reductions in the next three months. This shot up 13 points over September. Only five per cent plan to hire, half the number of September.
“Small business owners are deeply uncertain about the future and it is affecting their day to day operations in a big way. Employers are making tough decisions about staffing levels and have indicated there are more adjustments to come,” says Amber Ruddy, Director of Provincial Affairs for Alberta.
Insufficient demand continues to be the biggest limitation on business growth (68%). Sixty-nine per cent of entrepreneurs list tax and regulatory costs as a major cost constraint, while 66 per cent cite wage pressures. These indicators were down two points each from September.
The general state of business remained negative. Fourteen per cent of business owners say the general state of business health is good, while 35 per cent state they are in bad shape.
“Half-baked government policies like the $15 minimum wage and a multi-billion dollar carbon tax ignore current economic realities. Employers are making changes in their businesses now to prepare for pain yet to come,” said Ruddy.
The national Business Barometer index dipped to 57.7. The other provincial numbers were: PEI (65.8), British Columbia (65.5), Nova Scotia (65.5), Quebec (64.8), Ontario (60.4), New Brunswick (56.1), Manitoba (55.6), Saskatchewan (55.1) and Newfoundland & Labrador (44.4).
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.
October 2016 findings are based on 651 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through October 17. Findings are statistically accurate to +/- 3.8 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.