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Thursday, September 02, 2010 |
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Thursday, September 02, 2010 |
News Release: December 18, 2008 Alberta business optimism trumped by economic uncertainty, BSI shows Edmonton, Alberta – Global economic forces and uncertainty have buckled Alberta businesses’ long-held optimism, according to the latest ATB Financial Business Sentiments Index™ (BSI). The BSI surveys companies throughout Alberta to gauge their opinion and sentiment for the coming quarter. For the first time since the index’s inception in 2006, sentiment has dipped below the neutral value of 100, to 99.7. (An index value more than 100 indicates optimism, and less than 100 indicates pessimism.) “International difficulties have crossed the border into Alberta, and there’s no question that the province’s businesses are increasingly concerned,” said Todd Hirsch, ATB’s Senior Economist. Hirsch said it’s not surprising that sentiment in Alberta has fallen, given severe problems in global credit and financial markets. “Put in context, local sentiment actually remains relatively buoyant compared to the dismal readings of business and consumer sentiment in the U.S,” he said. At 99.7, the seasonally adjusted index level for the first quarter of 2009 is down substantially from 128.5 in the fourth quarter of 2008. In the first quarter of 2008, the index stood at 135.7. The BSI, a joint effort of ATB and the Western Centre for Economic Research at the University of Alberta, surveyed more than 400 companies between Nov. 17 and Dec. 4. The sentiments index is down markedly in all six of the sectors measured: oil and gas, construction, manufacturing, professional/technical, transportation/warehousing and wholesale. The construction industry appears the most pessimistic about the immediate outlook for 2009. “The sensitivity of the Alberta economy to the broad range of international uncertainties is evident across virtually all sectors included in our survey sample,” said Ted Chambers, a Research Professor at the Western Centre for Economic Research. “Undoubtedly the impact of falling crude oil prices has been strongly magnified by the effects of the financial crisis on household assets and the financial position of business enterprises. All this points to a very challenging time for the Alberta economy in the first few months of 2009.” In the medium term, though, survey results suggest that Alberta businesses have a slightly rosier view, with more businesses expecting their outputs to grow than shrink over the next 12 months. Some 26 per cent expected their outputs to decrease, 26 per cent said they will stay the same, 22 per cent said outputs will grow by less than 10 per cent and 26 per cent said they’ll grow by more than 10 per cent. The survey also asked Alberta business leaders whether lower gasoline costs have benefited their businesses. One in five said lower costs have had significant benefits, while the remaining businesses were equally split between seeing “somewhat” of a benefit, and no impact. The complete report is available at www.business.ualberta.ca/wcer. The next ATB Financial Business Sentiments Index™ report will be released on March 19, 2009. About ATB Financial – ATB Financial is the largest Alberta-based financial institution, with assets of $25.2 billion. It provides Personal and Business Financial Services, Investor Services, and Corporate Financial Services to more than 660,000 Albertans in 244 communities. It provides service through 163 branches and 133 agencies, telephone and Internet banking, a Customer Contact Centre, and Automated Banking Machines. ATB Financial was established in 1938 and has been a provincial Crown corporation since 1997. It was recently named one of Alberta’s Top 40 Employers by Mediacorp Canada Inc. About the Western Centre for Economic Research – The WCER is an applied research centre within the University of Alberta School of Business. The centre monitors the performance of Western Canada's economy, its policies and programs, and implications for business enterprises. Drawing on a wide range of expertise, recent work of the WCER has included analyses of the Alberta resource economy, Western Canadian international trade, the effects of free trade agreements, barriers to trade and the role of small business in the West. For further information please contact: Todd Hirsch |
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