Alberta business leaders see tough road ahead
When it comes to resuming normal business operations, 77 per cent ranked the continued impact of low oil prices on the Alberta economy as their top concern
By ATB Economics 16 June 2020 1 min read
According to a new Business Council of Alberta and Viewpoint Research report entitled Exceptional Times, Exceptional Measures, many of Alberta’s business leaders “expect the road to recovery to be long, difficult and winding.”
Based on a survey of 61 business leaders from across the Alberta economy, the report highlights the negative impact of the pandemic and low oil prices on current operations, with 90 per cent of businesses facing a moderate to significant decrease in revenue.
The report also points out that the reduced investment in capital projects and research and development required to weather the storm will have adverse effects over the long-term. Two-thirds of respondents (64 per cent) had to defer or cancel capital projects while a quarter (23 per cent) had to cut back on research and development.
The impact on staff has been particularly painful with 61 per cent of the businesses surveyed reporting having to layoff employees during the pandemic. Over half (54 per cent) had to implement pay cuts and 44 per cent had to reduce staff hours.
The report notes that, while the “overwhelming majority of those we surveyed are playing defence—cutting or freezing expenses where possible, ...some Alberta businesses have proactively added new product offerings or found new ways of operating to meet consumer needs.”
When it comes to resuming normal business operations, 77 per cent ranked the continued impact of low oil prices on the Alberta economy as their top concern. Even when energy sector businesses are excluded, 69 per cent of business leaders cite the troubles in the oil patch as the main barrier to Alberta’s recovery.
Hopefully both the situation on the ground and the confidence of business leaders will improve in the days and weeks ahead, but for the moment, the survey results suggest that the economic recovery will be an uphill battle.