Confidence drops for Alberta business leaders and consumers

Albertans’ confidence in the economy is fading, according to a survey of more than 160 business leaders and 900 consumers.

The PwC Business and Consumer Confidence Index, conducted by Leger Marketing, said optimism has fallen in recent months after the first half of 2012 was characterized by momentum and a positive outlook.

The November survey also showed that 57 per cent of business leaders said it was difficult to find suitable labour for their organization, with the majority stating they felt this labour shortage would impact their future business growth plans.

“While the overall indicators of business and consumer confidence remains optimistic, we’ve seen a very quick decline in a number of key factors since the last survey, indicating a softening of confidence in the Alberta economy,” said Ian Gunn, Alberta private company services leader at PwC Calgary.

The survey found business leaders are more apprehensive about current business conditions in November than they were in September, with a decline in optimism about future business conditions. After falling sharply in May and recovering in July, the future interest rate index has remained steady since September, as have opinions regarding fiscal conditions, said PwC.

After steadying briefly in September, the unemployment index also decreased in November, indicating that both business leaders and consumers are less confident in the job market than they were earlier in the fall.

Earlier this week, the Canadian Federation of Independent Business in its Business Barometer report, also reported that optimism levels among Alberta’s small business owners took a sharp drop in November as concerns over the shortage of skilled labour jumped.

A recent CIBC World Markets report indicated 30 per cent of the country’s businesses face a skilled labour shortage, which is double the rate seen in early 2010, with the issue being more acute in Alberta.

The PwC report said overall consumer confidence declined between September and November, although not as sharply among consumers as with their business counterparts. Despite this, however, the year-to-date consumer confidence index remains higher than the past five years.

Consistent with their business counterparts, consumer confidence in future unemployment has decreased — though not as sharply — indicating that consumers anticipate an increase in unemployment rates. Like business leaders, consumers also have confidence that interest rates will remain relatively consistent, a view that has held steady since September, said the survey.