Confidence index falls 7.6 points in January, following 8.7 drop in December; Alberta again lowest in country, worst result since 2016
CALGARY, January 31, 2018 – The monthly Business Barometer® index shows small business confidence across Alberta took another major tumble in January, according to the Canadian Federation of Independent Business (CFIB). The index fell another 7.6 points in the first month of 2019 to 37.5 points, the weakest result since late 2016.
Small business confidence has now dropped 16.3 points over the past two months, following the previous 8.7 point drop in December.
“Considering small business confidence is typically a harbinger of what is happening more broadly in the economy, it is especially worrisome,” said Richard Truscott, Vice-President, BC 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 just 15 per cent in January (down 6 points). This compares to 55 per cent who say it is ‘satisfactory’ (up 5 points), and 31 per cent who characterize it as ‘bad’ (up 2 points).
Taxes and regulatory costs are proving to be the biggest cost constraint, identified by 77 per cent of business owners, followed by fuel and energy costs (69 per cent) and wage costs (64 percent).
Hiring intentions have also worsened significantly in January with 35 percent of business owners now expecting to cut back on full-time staff over the next three to four months (up 6 points from December), compared to only 9 per cent who expect to hire new employees.
The provincial indices for January were: PEI (63.5), 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).
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.
The January 2019 findings are based on 930 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through January 20. Findings are statistically accurate to +/- 3.2 per cent 19 times in 20.
For media enquiries or interviews about the Alberta results, please contact Richard Truscott, Vice-President, Alberta and BC, at [email protected] or 403-444-9290. For national results, please contact Ted Mallett, Chief Economist, [email protected] or 647-464-2814
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region, including 10,000 in Alberta. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.