Small business confidence gaining traction, CFIB says

Small business owners in Alberta are feeling better about the future than they have since early 2015, a survey by the Canadian Federation of Independent Business found.

However, the organization says there is still a long way to go, as one in three business owners still reports their general state of business health as poor.

Alberta small business confidence rose more than five and a half points in March to 55.5 on the CFIB’s monthly Business Barometer index. This means that for the first time since January 2015, more business owners expect stronger business performance next year than those who expect weaker performance.

“Small business confidence is gaining traction, and confidence levels in Alberta are approaching the national average,” said CFIB’s Alberta spokesperson Amber Ruddy in a release. “There is, however, a long way to go for the Alberta economy to reach historic norms.”

The survey indicates short-term employment plans are negative, with 22 per cent of respondents looking to cut back on staffing while 13 per cent are looking to hire. Compared to the previous month, plans for staffing reductions are down five points, and employers looking to hire are up one point.

The top three major cost constraints identified by business owners in the survey were tax and regulatory costs (75 per cent), fuel and energy costs (67 per cent), and wage pressures (60 per cent). Sixtytwo per cent of businesses surveyed said lack of demand for products and services is their biggest limitation.

The growing confidence among Alberta businesses reflects the cautious optimism that has been expressed by some economists in recent months. The Conference Board of Canada has predicted Alberta’s economy will grow by 2.8 per cent in 2017, the fastest in Canada, after posting the country’s biggest drop in 2016.

The CFIB Business Barometer index is measured on a scale of 0 to 100, where 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 an economy is growing at its potential.

March 2017 findings are based on 730 responses, collected from a stratified random sample of CFIB members to a controlled-access web survey. astephenson@postmedia.com