Economic Confidence Reaches New Highs

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Alberta businesses, consumers more optimistic

The Alberta Business Confidence Index, measuring business owners’ optimism in the province’s economy, increased sharply in January to 127 points—marking the highest value in the study’s four-year history—according to the latest Business and Consumer Confidence Indices report from PwC and Leger Marketing.

A number above 100 is considered to be optimistic.

Business owners are far more optimistic about the job market. The future unemployment index is at its highest in January at 168 points, surpassing the previous peak in March 2010 (156) and increasing 36 points from November 2010.

With the improving economy, business owners anticipate a possible increase in interest rates, as evidenced by the decrease in the future interest rate index to 36 points in January from 56 points in November 2010.

“The year has started off on a positive note for Alberta business owners who share a growing optimism about the economy despite expectations that the interest rates will rise in the near future,” says Ian Gunn, partner and leader of PwC’s Private Company Services practice in Alberta. “Business confidence is once again on the way up and owners are less concerned about the job market than in recent periods.”

Alberta consumers are echoing business owners in their positive outlook on the province’s economy. The consumer confidence index increased to 108 points after remaining flat for the previous three periods.

Like business owners, Albertans are also more optimistic about the job market as indicated by the future unemployment index reaching 120 points in January, increasing for the first time since its decline in January 2010.

“For the first time since the economic downturn, we’ve seen a sharp rise in confidence in the job market from both consumers and businesses owners alike,” says Gunn. “The report also reveals a more positive outlook from consumers about their future household incomes and being in a better position to save money, buy a home or purchase major household items.”