Province’s entrepreneurs nation’s most pessimistic: poll

EDMONTON Alberta entrepreneurs are the most pessimistic of the Canadian economy heading into 2019 with limited investment expected in the resources industry, a recent report says.

The fourth annual Business Development Bank of Canada study surveyed about 4,000 small and medium businesses across the country toward the end of 2018 to determine their investment intentions and strength of the economy heading into 2019.

Results released Tuesday morning show relative confidence in the country’s economy and the desire for business owners to spend — but not so much in Alberta.

Businesses in the province were found to be the most pessimistic with only 35 per cent confidence in the Canadian economy, cited as the No. 1 issue for entrepreneurs. In contrast, Quebec businesses weighed in with 78 per cent confidence in the economy.

Bank chief economist Pierre Cléroux said the pessimism from Alberta businesses isn’t a surprise, but a good sign is entrepreneurs are still showing a willingness to spend.

“They are still investing. They want to invest more this year than last year,” he said. “That means they are confident the economy will come back and they are confident about their own business.”

The outlook for 2019 in Alberta shows a stable economy with similar growth to the previous year, but Cléroux said the bank anticipates an economic surge in 2020 routed in oil. “We’ll have to wait until 2020 before we see kind of a rebound and the reason why we expect to see that is we believe both the world and Canadian price of oil are going to improve in 2019,” he said.

Investment intentions across the province are strong in the services sector, but remain weak in the natural resources and construction industries. Investment intentions in resources dropped nine per cent across the country.

With entrepreneurs showing an eagerness to spend across the country, Cléroux said the main concern lies in the depleted labour market. “Although ( businesses) are confident about the economy and believe business is going to do well this year, they cannot invest as much as they would like because they cannot find the workers.”

Almost half of the business owners polled plan to spend money on intangible assets in 2019, such as intellectual property, which Cléroux said is a step in the right direction to combat the challenging economy. “Businesses investing in technology are performing better. Revenue growth and profit growth are increasing faster than other companies,” he said.