Alberta businesses and consumers continue to be optimistic about the economy: PwC survey

Business Confidence Index remains over 100, steady at 103 in July 2009

August 13, 2009 — The Alberta Business Confidence Index held steady at 103 in July, after crossing the 100 mark in May 2009, according to the Business and Consumer Confidence Indices survey from PricewaterhouseCoopers (PwC) and Leger Marketing. In fact, July’s results show that Alberta business leaders and consumers continue to be optimistic about economic conditions over the next 12 months:

• The future unemployment index was 107, crossing the 100 mark for the first time since May 2008 and indicating businesses increased optimism in the job market
• Another optimistic sign for the economy: the future interest rate index decreased in July 2009 to 73, from 86 in May and 94 in March, showing that as the economy improves, interest rates are likely to go up, which may have a negative impact on some Albertans and some organizations
• While the fiscal conditions measure has declined, PwC sees that Alberta businesses are still optimistic about the fiscal conditions for the next 12 months (112 in March 2009, 113 in May 2009 and 103 in July 2009)
• The current business condition index saw an increase of 20 points since May 2009 (from 27 to 47 in July 2009) and the future business condition index is down slightly from 186 in May 2009 to 181 in July 2009

“These figures are promising and likely indicate that many Alberta businesses are seeing and expecting more improvements in Alberta’s economic conditions in the coming year,” says Ian Gunn, partner and leader of PwC’s Private Company Services practice in Calgary. “The anticipated increase in interest rates in the future suggests that both businesses and consumers expect that lenders may raise rates in the face of an improving economy.”

Indeed, Alberta consumers are also reflecting similar sentiments as business leaders, with the Consumer Confidence Index attaining a steady value of 117 in July 2009 from 116 in May 2009 (a continual rise from 103 in January 2009). As well, survey results reflect a growing optimism among consumers for the job market as the future unemployment index continues its increase from 81 in May 2009 to 93 in July 2009. However, unlike business leaders, when it comes to the unemployment index, consumers are less positive that the job opportunities are returning as the index has still not yet crossed the 100 mark.

The future household income index remains steady at 123 in July 2009, an increase from 122 in May 2009, while the future interest rate has seen a continuous decline in the last six months from 125 in January 2009 to 79 in July 2009 -- consistent with responses from business leaders. Consumers also continue to see advantages in purchasing a house in the current economy. The index related to the purchased of a house has attained the highest value (164) since tracking started in February 2007.

“Consumers are starting to feel more positive on multiple fronts ranging from finding a job to buying a house,” says David J. Bryan, Advisory partner and leader of PwC’s Private Company Services practice in Edmonton. “As consumer confidence continues to rise, it reflects an increased expectation among consumers that both the housing and retail markets are more favourable.”

For more information on our services in Alberta, please visit www.pwc.com/ca/doingbusinessinalberta.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,200 partners and staff in offices across the country.

“PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.