Business confidence in Alberta tumbled last month, based on the latest survey by the Canadian Federation of Independent Business. Concerns about labour, particularly in the hospitality sector, appear to be a big reason why.
The CFIB reported on Thursday that the confidence level of small businesses in the province dropped 3.2 percentage points in July, to 69.4 on a 100-point index. In May, the confidence level was at a two-year high of 72.8.
“After several months of strong small business confidence numbers, it’s a bit concerning to see the provincial index decline by more than three points,” said Richard Truscott, director of provincial affairs for CFIB in Alberta.
“It certainly appears that labour shortages and rising wage costs are driving optimism among Alberta’s entrepreneurs in the downward direction.”
The survey found that 42 per cent of respondents felt a shortage of skilled labour was limiting sales or production growth, up four points from June.
“One other thing that shines through clearly in these numbers is how much the hospitality sector is hurting, some of which is no doubt related to the changes to the temporary foreign worker program announced in late June,” said Truscott.
The confidence level of business operators in the hospitality industry was just 52.8 in July, the lowest level in more than five years.
Nationally, the business confidence index slipped to 63.2 from 63.5 — the lowest reading since December 2013.
British Columbia had the highest confidence rating, at 72.3, followed by Newfoundland (72.2), Alberta, Manitoba (64.7), Saskatchewan (63.5), New Brunswick (61.7), Ontario (60.9), Quebec (60.5), Nova Scotia (59.6). and PEI (59.5).
Among the Alberta entrepreneurs surveyed, 35 per cent said they planned to increase their full-time staff within the next three months.
That was down two points from June.
Only six per cent expected to cut staff, which was an increase of one point.
Fifty-five per cent of Alberta’s business operators described the general health of their business as “good,” up two points from June.
Six per cent described it as “bad,” down two points.