In February, the Business Council of Alberta conducted its latest Alberta Business Expectations Survey (BES)—a tool to assess recent trends in business conditions and economic expectations in the province. This survey captures the perspectives of BCA’s strongest asset—our member CEOs—whose expectations play an important role in setting the direction of the provincial economy.
Sales expectations remain strong
- A majority of businesses (54%) continue to report an uptick in recent forward-looking indicators, though sales growth is moderating: in November, this number was 67%.
- As such, expectations for future revenue have moderated but remain strong: 55% of respondents expect sales volumes over the next year to accelerate, while 42% expect sales to remain about the same (compared with 60% and 50%, respectively, in November).
- As a result, the balance of expectations remains strongly positive but has moderated: 42% versus 50% in November.
The search for workers continues
- An impressive majority (61% of respondents) continue to report plans to increase staffing over the year, while just 13% expect employment to decrease.
- At this point, labour shortages remain a challenge though more businesses (35% versus 24% as of November) find they are less intense than a year ago.
- A strong majority (61%) continue to report difficulty filling the positions needed to meet demand, in line with the last survey.
Businesses still planning to invest despite higher cost of financing
- 40% of respondents expect to spend more on machinery and equipment—in line with our previous survey—over the next year, while just 23% expect to spend less.
- As such, the balance of expectations for investment spending remains positive at 17%.
- As expected, in the face of interest rate hikes (there have been another two hikes since our last survey), most businesses (53%) report that terms and conditions for obtaining financing have tightened.
- This leaves the balance of expectations negative: -45%, more or less in line with the previous survey.
Summary of Results
As a whole, the BES survey results are encouraging for Alberta businesses and Albertans. Ultimately, they do not suggest any major cracks in the strength of Alberta’s economy. The fact that businesses remain eager to hire and many still plan to invest is telling of the province’s fundamentals. Nonetheless, business challenges of “capacity” and the acute need for individuals with certain skills should not be ignored, especially to the extent that they represent growing needs for the Alberta economy longer-term.