The Canadian Federation of Independent Business (CFIB) released the latest Business Barometer survey results last week that show Alberta’s small business confidence dropped 3.2 points in July to 69.4. The national Business Barometer Index also dipped slightly to 63.2, its lowest reading since December 2013.
“After several months of strong small business confidence numbers, it’s a bit concerning to see the provincial index decline by more than three points. It certainly appears that labour shortages and rising wage costs are driving optimism among Alberta’s entrepreneurs in the downward direction,” says Richard Truscott, Director of Provincial Affairs for CFIB.
For the third month in a row, entrepreneurs in British Columbia (72.3) were the most confident in the country about the economy and the future prospects for their business, followed by Newfoundland (72.2), Alberta (69.4), Manitoba (64.7), Saskatchewan (63.5), New Brunswick (61.7), Ontario (60.9), Quebec (60.5), Nova Scotia (59.6). and PEI (59.5).
Several other key aspects of the Business Barometer stayed relatively steady.
Short-term hiring intentions among Alberta’s entrepreneurs remained strong in July, with 35 per cent saying they planned to increase full-time staff within the next three months, down two points from June. By comparison, only six per cent expected to cut back full-time staff, an increase of just one point.
In July, 55 per cent of Alberta’s entrepreneurs characterized the general health of their business as being “good”, up two points from June. Only six per cent described it as “bad”, down two points from the previous month.
“Finding enough qualified workers remained by far the most serious challenge for small business”, says Truscott. Forty-two per cent per cent of entrepreneurs surveyed said the shortage of skilled labour was limiting sales or production growth, up four points from June, and 17 points higher than any other business constraint.
“One other thing that shines through clearly in these numbers is how much the hospitality sector is hurting, some of which is no doubt related to the changes to the Temporary Foreign Worker Program announced in late June”, concludes Truscott. The confidence index in the hospitality sector during July was 52.8, the lowest level recorded in over five years.