More than 250 of Alberta’s business leaders indicated that their overall confidence in the economy has decreased, continuing its decline over the last twelve months. However, Albertan consumers are more optimistic. They have more confidence in the economy and are more likely to make major purchases in 2013.
The survey found that business leaders are more apprehensive about current business conditions in January 2013 than they were in November 2012, but there has been an increase in optimism about future business conditions. Although, the future interest rate index has remained steady since September 2012, there has been a slight decline in January 2013, as have opinions regarding fiscal conditions.
The unemployment index has stabilized in January 2013, after following a steady decline since March 2012, indicating that both business leaders and consumers are optimistic the unemployment rate will fall in the coming months.
The January survey also showed that approximately half (52%) of business leaders believe that there will be a negative impact on their businesses with the upcoming provincial budget. However, the personal tax freeze is seen as a benefit for businesses.
“As most overall indices have decreased or remained steady since November 2012, confidence in the economy continues to soften due to drops in oil prices as well as the US election outcome” says Ian Gunn, Alberta Private Company Services Leader at PwC Calgary.
Overall consumer confidence has increased between November 2012 and January 2013; a large contrast with their business counterparts. The year-to-date consumer confidence index, tied with 2012, remains the highest in the past five years. However, consistent with their business counterparts, consumers feel that interest rates will rise in the future. Nearly half of consumers (46%) have already, or are planning to, contribute to an RRSP for the 2012 year. Over half of these consumers (55%) are planning on, or have already contributed, the same amount as last year.
About 83% of Albertan consumers did not incur debt over the holiday season. Less than one in five (17%) of consumers incurred additional debt due to Christmas spending. Approximately 13% of Albertans stated they have already paid off their debt and 26% indicate it will take one month to do so. On average, consumers expect to pay off their debts in 3.1 months.
Based on the survey being conducted previous to the deficit announcement, Alison Redford’s Progressive Conservative Party of Alberta would be the winner if an election were held today, with about one-quarter (26%) of consumers stating their affirmative vote. Danielle Smith and the Wildrose Party is the second choice at 18%. Calgarian consumers are more likely to vote for the Wild Rose party than Edmontonians. However, almost 21% of Albertans are undecided on the issue.
The PwC Business and Consumer Confidence Index tracks and determines business and consumer confidence in the current and future Alberta economy.