Alberta small business confidence has fallen to a record low and taken national sentiment to the lowest since 2009, a Canadian Federation of Independent Business survey shows.
The index for the western province hit hardest by the drop in oil prices fell to 34 in September from 40.4 in August, the lowest in tracking back to 2008. Alberta also set a record with 24 percent of companies saying they are in “bad shape” versus 26 percent in “good shape,” the CFIB said in a report Thursday.
“Business optimism in Alberta plummeted sharply once again in September,” the report said, with the province’s index falling from 54.8 in January. “Short-term hiring plans grew even weaker with 26 percent of owners expecting to cut full-time staff while only 13 percent intend to hire.”
Canada’s economy shrank in the first half of the year as the drop in crude oil prices below $50 a barrel, from more than $100 last year, led companies to cancel investment and fire workers at higher-cost projects in Alberta. Policy makers have said that the rest of the economy is regaining momentum as the lowest Canadian dollar since 2004 and a U.S. recovery is boosting non-energy exports.
The national CFIB index declined a fourth month to 56 from 56.7 in August, reaching the lowest since April 2009. Readings greater than 50 suggest owners expect an improvement over the next year, and a level of between 65 and 70 is consistent with an economy growing at its potential.