Business confidence for Alberta still high

Business owners in Alberta bucked a national trend toward pessimism last month, according to the latest survey by the Canadian Federation of Independent Business.

Business owners in Alberta bucked a national trend toward pessimism last month, according to the latest survey by the Canadian Federation of Independent Business.

The association of small and medium-sized businesses calculated the confidence level of its Alberta members at 72.6 on a 100-point scale. That figure was down slightly from a 72.8-point rating in May — which was the highest figure in two years.

“It’s great to see confidence levels stay high for a couple of months in a row,” said Richard Truscott, the CFIB’s director of provincial affairs for Alberta. “Despite the many challenges they face, Alberta’s entrepreneurs appear to be maintaining a positive outlook about the future.”

Alberta’s June score was well above the national rating of 63.5, which dipped 3.5 points from May.

The province remains behind British Columbia when it comes to business optimism, with its western neighbour scoring 73.7 in June.

Newfoundland followed Alberta at 70.0, with Saskatchewan next at 65.8. Manitoba’s rating was 64.0, Quebec’s was 62.0, Ontario’s was 61.9, Prince Edward Island came in at 61.0, New Brunswick was 60.7 and Nova Scotia was 55.8.

Of the business owners surveyed in Alberta, 53 per cent described the general health of their business as good, up eight points from May. When it came to short-term hiring intentions, 37 per cent said they plan to add to their full-time staff within the next three months, up two points over May. Only five per cent expect to cut back.

“Labour shortages continue to vex business owners in our province as their number 1 operating challenge,” said Truscott.

Thirty-eight per cent of business owners surveyed identified the shortage of skilled labour as limiting sales or production growth, while 23 per cent said a scarcity of people to fill lower-skilled positions was a limiting factor.

Confidence among business owners in Canada’s hospitality sector dropped eight points in June, to 53.0. The CFIB pointed out that on April 25 the federal government imposed a moratorium on employers in the food services sector from using the temporary foreign worker program.

The national result was not all bad news. New orders remained strong, concern about lack of local demand fell to its lowest levels this business cycle, and short-term hiring plans were reasonably good for this time year, the CFIB said.

Canada’s economy has gone through a rough patch of late since the strong fourth quarter of last year, with growth falling to only 1.2 per cent in the first three months of this year. Meanwhile, the first quarter in the U.S. saw the economy there slide 2.9 per cent due to the unusually harsh winter.

But many analysts believe there is more to Canada’s flat performance so far in 2014 than bad weather. The long-anticipated recovery in the export sector has yet to materialize and business investment has been disappointing. Meanwhile, the domestic economy, has cooled as expected.

In a note to clients, Scotiabank economists Derek Holt and Dov Zigler said Canadians shouldn’t expect a big pick-up in the second quarter either, although it will likely be better than the first.

“The Canadian economy put in a very mixed performance to start the second quarter, and so we’re playing it cautiously with respect to a call for modest growth when Monday’s monthly GDP print for April lands,” they wrote. They estimated that second-quarter growth in Canada will likely come in at roughly two per cent.

Consumers also appear cautious, according to a survey from the Chartered Professional Accountants of Canada that suggests Canadians won’t be swarming to the malls this summer.

The survey found only a quarter of Canadians saying they intend to spend more this summer than last, suggesting households are in a saving mood. About the same number plan to spend less. The survey found similar results on vacation plans.

The June CFIB survey was based on 1,042 responses from CFIB members received through June 16.

With files from The Canadian Press.

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