More than 160 of Alberta’s business leaders and 900 consumers indicated that their overall confidence in the economy has decreased after showing signs of revival in September 2012. While the first half of 2012 was characterized by momentum and a positive outlook, confidence has dropped in the second half of the year amongst both business leaders and consumers.
The survey found that business leaders are more apprehensive about current business conditions in November than they were in September, with a decline in optimism about future business conditions. After falling sharply in May 2012 and recovering in July, the future interest rate index has remained steady since September, as have opinions regarding fiscal conditions.
After steadying briefly in September, the unemployment index also decreased in November, indicating that both business leaders and consumers are less confident in the job market than they were in the fall. The November survey also showed that more than half (57%) of business leaders currently find it difficult to find suitable labour for their organization. The majority of those also indicated that they felt this labour shortage would impact their future business growth plans.
“While the overall indicators of business and consumer confidence remains optimistic, we’ve seen a very quick decline in a number of key factors since the last survey, indicating a softening of confidence in the Alberta economy,” says Ian Gunn, Alberta Private Company Services Leader at PwC Calgary.
Overall consumer confidence declined between September and November, although not as sharply amongst consumers as with their business counterparts. Despite this, however, the year-to-date consumer confidence index remains higher than the past five years. Consistent with their business counterparts, consumer confidence in future unemployment has decreased—though not as sharply—indicating that consumers anticipate an increase in unemployment rates. Like business leaders, consumers also have confidence that interest rates will remain relatively consistent, a view that’s held steady since September.
Consumers indicated that they are less likely to purchase a house in November than they were in September, with 85% reporting that it’s either “Not at all likely” or “Not likely” they would consider such a purchase in the next 12 months. Only 7% of Albertans stated that they were “Very likely” or “Extremely likely” to buy a home in that time. Of those who are likely to buy, single family homes are most popular (64%) followed by 21% opting for either a townhome or duplex. The likelihood for consumers to purchase major household items declined sharply in November—following an increase in September—with the majority of consumers indicating that they also anticipate a decrease in household income.
When asked—from a purely Alberta perspective—for their opinion on the outcome of the recent United States Presidential election, nearly two-in-five business leaders (38%) and 47% of consumers reported that the re-election of U.S. President, Barack Obama, will make no difference to the Alberta economy, with nearly as many business leaders (31%) suggesting that the re-election would actually hinder Alberta’s economy. Less than one-third of business leaders (27%) and less than one-in five consumers (16%) believe that President Obama’s re-election will provide more momentum to the provincial economy.