Small business confidence in retreat across Alberta

Hiring plans all but frozen across province

CALGARY — Small business confidence in Alberta is the lowest in Canada and continues to slide, according to the latest Canadian Federation of Independent Business findings.

Its Business Barometer, released Thursday, showed Alberta’s monthly index measure fell one point to 47 in April. Nationally, seven of 10 provinces had a decline as the overall index fell one point to 60.5.

Amber Ruddy, senior policy analyst for the CFIB in Calgary, said confidence levels in the province remain well above the recessionary low of 37 in February 2009.

“The fallout from the shift in energy price fundamentals is definitely still working its way through the economy and the energy sector has been hit the hardest. The natural resources sector in our Business Barometer is the lowest,” said Ruddy.

“Hopefully this trend will begin to curb because as policy-makers can control some of those levers to guide the direction of the province. We’d want to ensure that the fundamentals in the oil and gas sector are preserved and given the right signals to increase investment there and weather this.”

The CFIB report said hiring plans in the province have virtually come to a standstill as only 21 per cent of business owners surveyed said they planned to add full-time staff over the next three months versus 17 per cent who plan to cut back.

Also, 35 per cent said their firms are in good shape, an eight point drop over March and down 20 points from mid-2014.

The report also found 35 per cent of owners identified the skilled labour shortage as a problem — down three points from last month and at the lowest level in Alberta since late 2013.

Ruddy said half of business owners list taxes, regulatory costs and wages as major cost constraints.

British Columbia led the nation in small business confidence (71.9) followed by Prince Edward Island (69.2), Nova Scotia (63.3) and Ontario (62.5).

The Business Barometer is measured on a scale between 0 and 100 and an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance, said the CFIB. An index level of between 65 and 75 means the economy is growing at its potential, it said.

Earlier this week, the Bank of Montreal’s semi-annual small business confidence report found optimism was sinking in the province along with oil prices.

It found 48 per cent of Alberta small business owners asked (versus 26 per cent nationally) believe 2015 will be worse for business. Thirty per cent said it would be better, compared to 51 per cent nationally. The report also found 38 per cent of responding Alberta entrepreneurs expect the economy to worsen this year, while 19 per cent expect it to improve.