Despite a decrease in small business confidence in Alberta in March, Airdrie Chamber of Commerce President Mike Watkins is optimistic about the city’s economic future.
According to the Canadian Federation of Independent Business (CFIB), the Business Barometer® index in Alberta fell by almost four points to reach 66.7, causing the province to lose its lead position among the nation.
According to the CFIB, 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 70 when the economy is growing at its potential.
Watkins said Alberta’s numbers may indicate slow, steady growth.
“We want steady, modest growth in the long term,” he said. “We don’t want something that just skyrockets. I feel positive and I feel optimistic.” The CFIB report is based on results of a random survey of 1,121 CFIB members across Canada including 201 in Alberta.
“Although still well above the national average, the Alberta numbers show a decline in optimism,” said Amber Ruddy, CFIB’s Alberta policy analyst. “The economy is not quite running on all cylinders, but we are seeing steady modest growth over the long term.”
Small business owners in Saskatchewan and Newfoundland and Labrador led the provinces in small business confidence at 71.5 and 69.4 respectively.
The biggest declines in confidence took place in Alberta and Ontario, at 61.9.
While Quebec (66.4), British Columbia (65.7), and Manitoba (64.5) are above the national average of 62.9 per cent, New Brunswick (60.4), Nova Scotia (60.4) and Prince Edward Island (56.4) are below.
According to Ruddy, nationally, full-time hiring intentions are at a post-recession high. In Alberta, 31 per cent of owners expect to hire full-time staff in the next few months.
Fifty-five per cent of entrepreneurs say the state of business is “good”, which is up five points from last month. In comparison, six per cent of owners say the state of business is in “bad” shape, according to a CFIB press release.
Ruddy said the survey, which is done monthly, is a snapshot on how businesses feel about the future. The CFIB asks survey participants several questions about the general health of the economy, major cost constraints, limitations on growth of sales or production growth, hiring intentions and whether shortage of qualified labour is a concern.
She said although it is hard to pinpoint the drop in Alberta’s index, it may be the result of outside factors such as the price of oil and the world economy.
“People are exercising caution, but there is nothing serious to worry about,” said Ruddy, when asked what the results indicate. “We have dropped four points, but it still shows there is some steady, modest growth.”
Watkins agreed, saying a recent Airdrie Chamber of Commerce business survey showed local businesses are optimistic.
“Eighty-two per cent of respondents thought they would do better in the next 12 months,” he said. “Chamber members in Airdrie are confident in the future.”
Ruddy said the CFIB will continue monitoring small business confidence and will continue speaking to government about tax reform and red tape on behalf of its 109,000 members across Canada.
