Alberta small business confidence showed little change at the end of May, increasing only 0.2 points to an index of 55.5 on the Canadian Federation of Independent Business (CFIB)’s Business Barometer, which was released on Thursday.
According to the CFIB, An index level near to 65 indicates that the economy is growing at its potential.
“Although more businesses have been given the go-ahead to reopen in Stage 1 of Alberta’s relaunch strategy it’s not going to be business as usual for small businesses,” said Annie Dormuth, CFIB’s Alberta provincial affairs director, in a news release. “Small businesses are going to be facing revenue shortfalls from the closures, slower foot traffic and concerns about ensuring they reopen safely while protecting their staff and customers.
“With the Alberta legislature resuming this week, we hope the government will announce more details on supports for small businesses, including temporary eviction protection for commercial tenants in good standing prior to the pandemic.”
The CFIB said only 10 per cent of Alberta business owners say their business is in good shape, compared to 48 per cent who say their business is in bad shape. Hiring plans remain quite weak in Alberta with only seven per cent of business owners planning to hire full-time staff in the next three months, while 32 per cent are planning for layoffs.
Nationally, small business confidence dropped less than a full index point to 52.5 points in the second half of May. The provincial results for May are: Nova Scotia (59.2), Ontario (57.1), Alberta (55.5), British Columbia (52.7), Saskatchewan (51.9), Manitoba (50.0), New Brunswick (47.8), Newfoundland and Labrador (43.5), Quebec (35.7), and Prince Edward Island (30.0)
The CFIB said natural resources sector was tied with arts and recreation for the lowest sectoral optimism level at 37.5 index points, followed by agriculture (43.5). Meanwhile, health services and financial services tied for the highest optimism level at 59.4 index points. Most other sectors posted results close to the national average.
“Business spirits improved markedly over May, with the CFIB’s barometer climbing above the 50-point threshold for the first time during the pandemic. Progress on provincial re-opening plans is probably stoking optimism among small businesses, while the rollout of government support programs is also likely a positive factor,” said Rishi Sondhi, Economist with TD Economics.
“The index joins other indicators (such as high-frequency home sales data) suggesting that economic activity improved from the severely depressed levels recorded during April. But the scale of the already-seen drop means a tough climb ahead. Indeed, with the barometer well below its long-run average, small businesses only using half of their capacity, and hiring and investment plans remaining low, it’s clear that small businesses are in for a tough slog on the road to a new ‘normal’.”
