Alberta’s small businesses confidence nose-dived in January.
The Canadian Federation of Independent Business said its Alberta business confidence index fell another 7.6 points to 37.5 points, the lowest level since late 2016 and the worst rating among Canada’s provinces.
Small business confidence has now plummeted 16.3 points over the past two months. Measured on a scale between 0 and 100, an index level between 65 and 75 normally indicates that the economy is growing at its potential and a majority of owners expect their business’s performance to be stronger in the next year, says the CFIB.
“Considering small business confidence is typically a harbinger of what is happening more broadly in the economy, it is especially worrisome,” said Richard Truscott, CFIB vice-president for B.C. and Alberta.
“Weak market demand coupled with rising taxes, higher energy costs, the $15 minimum wage, and a long list of new prescriptive occupational and employment regulations are weighing heavily on Alberta’s small business, and may signal more difficult times ahead for our province.”
The proportion of entrepreneurs who describe the state of their business as “good” fell to 15 per cent in January, down six per cent from the previous month.
This compares with 55 per cent who say it is “satisfactory” — up five per cent — and 31 per cent who characterize it as “bad” — up two per cent.
Taxes and regulatory costs are the biggest cost constraint, identified by 77 per cent of business owners. Fuel and energy costs followed at 69 per cent and wage costs at 64 per cent.
Hiring intentions also worsened significantly in January, with 35 per cent of business owners now expecting to cut back on full-time staff over the next three to four months — up six per cent from December. Only nine per cent expect to hire new employees.
The index for the rest of the country is: P.E.I. (69.2), Quebec (63.5), Nova Scotia (63.1), New Brunswick (61.3), Ontario (60.4), British Columbia (57.3), Manitoba (56.3), Saskatchewan (55.2), Newfoundland & Labrador (47.9), and Alberta (37.5).
Findings were based on 930 random responses from CFIB members. Results are stastically accurate to plus or minus 3.2 per cent, 19 times out of 20.