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Energy rebound at the root of business optimism

Energy rebound at the root of business optimism

Posted on: 3/21/2018 | Author: ATB Financial's Economics + Research Team


The Owl is taking the time this week to share some of the results from ATB Financial's latest Business Beat survey. Yesterday, we highlighted the findings that suggest among small and medium-sized businesses, economic and business optimism is growing and is almost back at levels last seen before the recession. Today’s edition breaks down the economic and business optimism levels by industry.

Small and medium-sized energy businesses were the most optimistic when asked about future business performance. The business index for this category stood at 77.2, 18 points higher than the previous quarter. Small and medium-sized retail businesses were the most optimistic among all industry types surveyed when asked about the province’s future economic performance. The economic index for this category stood at 74.6 during the last round of polling. Construction companies also had higher business and economic indices from last quarter suggesting a greater degree of optimism about future performance.

At the time of this survey, oil’s price was $US 63.40 per barrel (West Texas Intermediate, WTI), this was 20 per cent higher than the same time last year. Even though there are challenges with pipeline capacity constraints, and mounting US supply, in general, Alberta’s energy industry is more stable and growing. In fact, many analysts (including ATB's economics group) expect the energy sector to grow again this year. This stability and continued growth are resulting in higher optimism among all of the province’s small and medium-sized businesses regardless of industry type.

While the growth in positive sentiment among businesses is good news, it doesn’t mean that our economy is as strong as it was before the recession. Instead, it suggests small and medium-sized businesses see the economic backdrop as improving and are cautiously optimistic this will carry forward into the future.

The full version of this latest ATB Business Beat survey will be out in mid-April. Subscribe to receive upcoming editions.

Business Beat optimism, graph​ ​

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