ALBERTA—The recent Alberta Business Expectations Survey suggests that Alberta CEOs feel we are not out of the woods yet in terms of our economy and employment. Nearly half—47%—of Alberta chief executives said they expect employment levels to be lower in the next 12 months than they are today.
“The real reason we talk about the economy is because of what it means for people,” says Mike Holden VP, Policy and Chief Economist at the Business Council of Alberta. “Albertans are nervous about their job and their future. The bottom line here is that leaders from many of Alberta’s largest and most significant businesses are saying things will get worse before they get better. We’ve already seen announcements of layoffs in recent weeks, and unfortunately, I expect we’ll see more.”
Business Expectations Survey
Modeled after the Bank of Canada’s Business Outlook Survey, which is used to guide interest rate policy decisions, the Business Council of Alberta’s Business Expectations Survey is designed to capture the specific perspective of leading Alberta CEOs on the short-term outlook for the provincial economy.
This inaugural survey points to several trends that show that the recovery in Alberta is likely to be longer and slower than Albertans would like:
- Financing remains tight with one third (33%) reporting the credit environment has deteriorated in the past three months
- More than half (54%) expect investments in machinery and equipment, a key determinant of productivity growth, to be lower in the next 12 months
- Six in 10 (62%) businesses report their forward-looking indicators like order books, advance bookings, and sales inquiries have deteriorated from a year ago
“While most economics is backward looking, this gives us a chance to look out the front windshield rather than the rear-view mirror,” says Holden. “That said, it’s important we recognize the path forward can be altered. While there is nothing we can do about the past, we can absolutely change which road we drive down in the future.”
Brighter lights
There were some positive notes in the survey. For many, business appears to be stabilizing: nine out of 10 executives (88%) said they expect to see their overall sales to stay the same or improve over the next 12 months. One quarter of businesses (26%) expect to be hiring in the next year, which offers hope and optimism to Albertans looking for work.
Solutions
This shows that the urgent and immediate focus needs to be on job creation. What Albertans want is to see governments and business work together sincerely to solve these challenges. Working together to accelerate diversification, innovation, stabilizing our resource sector, and finding practical ways to get project approvals accelerated so that people can get back to work, are all highly valuable examples of collaboration.
“The pathway to changing this story from a public policy standpoint involves creating robust plans to live with COVID, creating a more competitive business environment, broadening our economic base, enhancing productivity and technology, and making policies and investments that are inclusive of Canada’s natural resource sector in the economic recovery,” says Holden.
About the survey
The survey consists of nine questions about previous and anticipated trends in sales, investment, employment, and credit conditions. It was in the field from September 10th to September 28th. The survey is specifically of Alberta chief executives and received 43 responses.
Key findings charts:
Employment
Future Sales Expectations
Machinery & Equipment Investment
Access to credit
