Alberta small business confidence sees sharp drop in November

Shortage of skilled labour a concern

Optimism levels among Alberta’s small business owners fell sharply in November as concerns over the shortage of skilled labour jumped, according to the latest Business Barometer report released Wednesday by the Canadian Federation of Independent Business.

The CFIB said its barometer dropped by 3.9 points to 68.3 for Alberta, erasing most of the gains made since the summer.

“The slide in confidence among Alberta’s entrepreneurs last month reflects what has been happening across much of the country,” said Richard Truscott, Alberta director for the CFIB.

“A lot of the drop can be attributed to significant de- clines in specific sectors, such as natural resources, manufacturing, and business services.”

According to the November numbers, entrepreneurs in the natural resources sector were the least confident, followed by those in the agriculture sector.

The percentage of small business owners who said they are planning to hire in the next three to four months jumped four points in November to 35 per cent.

Fifty-four per cent said their employment levels would remain the same, down from 62 per cent from the month before. Only 10 per cent predicted the size of their workforce would shrink, up from seven per cent in October, said the CFIB.

This serves as a reminder of the external headwinds

DINA IGNJATOVIC

Truscott said concern among Alberta’s independent business owners about labour shortages continues to grow.

In November, 51 per cent of the entrepreneurs surveyed said the shortage of skilled labour was a main operating challenge for their business, up seven points over the previous month, and almost 20 points more than any other factor.

Nationally, the i ndex dropped 2.7 points in November to 62.9.

Despite the almost fourpoint drop in Alberta, the province’s small business owners remain the second most optimistic in the country. Newfoundland (74.1) was again the leader in Canada, followed by Alberta (68.3), British Columbia (67.1) and Saskatchewan (66.4).

The Business Barometer is measured on a scale between zero and 100 and 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.

“The outcome of the U.S. elections — which didn’t change the political landscape much — and the renewed focus on the fiscal challenges that exist south of the border, likely played a role in the souring of confidence among Canadian business owners last month,” said Dina Ignjatovic, economist with TD Economics.

“This serves as a reminder of the external headwinds facing Canadian businesses and the economy as a whole.

“The good news is that even with all the global economic uncertainty, hiring intentions of businesses remain above average, suggesting that they expect conditions to improve going forward.”