Alberta’s economy may be slowly recovering but there’s still some angst among the province’s small business owners.
According to the latest Business Barometer by the Canadian Federation of Independent Business, the optimism levels of entrepreneurs took a bit of a dip in July declining 0.7 points to 55.8, one point below the national index of 56.8.
The CFIB index is measured on a scale between zero and 100. The CFIB says 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.
“Although small business confidence has taken a slight hit this month, it is encouraging to see other key indicators tick upwards like the intention to hire,” said Muriel Protzer, policy analyst for B.C. and Alberta, in a statement.
“Business owners in Alberta already face a long list of operating and competitive challenges in the market. On top of all that, they also face ever-increasing taxes, regulations and red tape from government, all of which can weigh heavily on their outlook.”
The barometer indicated that full-time staffing intentions rose by two points, with 17 per cent of business owners looking to increase full-time employees. In contrast, the proportion of entrepreneurs looking to cut back on staff decreased by a point, now at 14 per cent, said the CFIB report.
It added that the state of business health indicator has not changed since June, with 26 per cent of entrepreneurs seeing their firms in good standing. But there was a two-point increase in those who see their firms in bad shape, now at 21 per cent.
The other provincial numbers were: Prince Edward Island (73.1), Quebec (69.5), Nova Scotia (65.0), Manitoba (60.1), Ontario (56.5), British Columbia (56.1), New Brunswick (55.3), Newfoundland and Labrador (52.9), and Saskatchewan (50.0)
Small business confidence nationally plunged by 5.4 points to 56.8 in July (from 62.2 in June). The decline put the index back below its year-ago level, said Ksenia Bushmeneva, an economist with TD Economics.
“It’s little surprise that the CFIB business barometer index plunged in July. The latest survey period coincided with a fresh round of trade jitters following the G7 summit, Canada’s retaliatory response to the U.S. steel and aluminum tariffs, concerns about auto tariffs and escalating global trade divisions. Evidently, increased trade uncertainty has taken a toll on Canadian small and medium businesses in July,” said Bushmeneva.
“Trade worries were apparent in regional data, with business confidence in export- and manufacturing-oriented Ontario declining the most. Industrial data tells a similar story, with declines in confidence in agriculture, manufacturing and trade-related industries. Businesses also tend to scale down their expansion plans during uncertain times, which is evident in the decline in capital expenditures and hiring intentions.
“While data tends to be volatile on a monthly basis, concerns about trade will likely continue to weigh on business sentiment in the months ahead, particularly if the U.S. administration decides to go ahead with auto tariffs. The impact from auto tariffs will be significant both for the Canadian economy and especially for Ontario.”
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
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