Owners of Albertan small and mid-sized enterprises (SMEs) are more optimistic about the province’s economy and the future of their businesses.
The ATB Business Index, which measures Alberta business owners' confidence in their own operations, measured 66.1 for the first quarter of 2017, said ATB Financial in an announcement March 20. That's the highest ATB Business Index score since the fourth quarter of 2014, when energy prices started to decline. It's also a jump of 17.6 points compared to the previous quarter, the largest quarterly increase in the ATB Business Index since its inception in 2013. A score above 50 suggests more businesses are optimistic than pessimistic.
Largest-ever quarterly increase
Meanwhile, the ATB Economy Index, which measures Alberta business owners' confidence in the Alberta economy, registered its highest result since the third quarter of 2014 at 58.4. That's 22.3 points higher than the previous quarter, representing the largest-ever quarterly increase in the ATB Economy Index.
Seventy-two per cent of Alberta business owners believe the province's economy will improve or stay the same in the next six months, while 84 per cent said they believe their company will be better off or the same six months from now.
Confidence linked to the price of oil
"Confidence continues to be directly linked to the price of oil," says Teresa Clouston, Executive Vice-President, Business & Agriculture, ATB. "The latest index results confirm that many businesses have weathered the storm and are looking forward to the future, however it also means confidence may be fickle if the price continues to fluctuate as it has recently."
Business owners in the energy sector are more optimistic about their own operations than their counterparts in other industries. Among energy SMEs, the ATB Business Index was 74.3, its highest score since the second quarter of 2014, followed closely by manufacturing (74.1), retail (71.4) and construction (62.9). All sectors experienced significant increases in sentiment for both indexes.