Business confidence in Alberta going in the wrong direction
Optimism eroded for the third month in a row in October
By Rob Roach, ATB Economics 29 October 2021 1 min read
Based on a survey of its members, the Canadian Federation of Independent Business (CFIB) produces an index of small business confidence called the Business Barometer®. The barometer’s long-term index* is based on how businesses expect to be performing in 12 months.
Despite strong oil and natural gas prices, the index for Alberta fell for the third month in a row, going from 70.9 in July to 57.5 in October. (The index got as low as 26.2 in March 2020 just after the pandemic was declared.)
The short-term index for Alberta, which is based on 3-month forward expectations for business performance, has also been falling since the summer. After hitting 55.6 in July, the index has dropped to 39.6 in October. (The short-term index bottomed out at just 9.0 in April 2020.)
The long-term index fell in October in six provinces while short-term confidence pulled back in all but two. Ontario was the only province in which both the long-term and short-term outlook improved.
The long-term index rose in October in only three of the 13 industries included in the survey: retail, natural resources and professional services. (The industry-level numbers are for Canada as a whole.)
Meanwhile, the short-term index deteriorated in all but two industries: professional services and the information, arts and recreation sector.
Uncertainty regarding inflation, supply chain disruptions, labour shortages and the ongoing pandemic help explain the lower numbers in October.
*Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger in the next year outnumber those expecting weaker performance.
Answer to the previous trivia question: The national youth (ages 15-24) unemployment hit 29.1% earlier in the pandemic.