Alberta business sentiment study reveals cheerier economic outlook

EDMONTON, Sept. 18 /CNW/ - Alberta businesses are benefiting from the province's improving economy and look to the final quarter of 2009 with a cheerier disposition, according to the latest ATB Financial Business Sentiments Index(TM) (BSI).

The BSI surveys companies throughout Alberta to gauge their opinion and sentiment for the coming quarter. Expectations for the fourth quarter of 2009 rose to 114.9, after third-quarter sentiment stood at 107.0. (An index value more than 100 indicates optimism, and less than 100 indicates pessimism.)

"As we move into the final months of the year, business attitudes seem decidedly more cheerful," said Todd Hirsch, ATB's Senior Economist.

"But I think businesses are also being realistic. Alberta's economy has improved, but it could be a bit of a slow march forward. That's reflected in the sentiment. It's improved, but cautious."

The BSI, a joint effort of ATB and the Western Centre for Economic Research at the University of Alberta School of Business, surveyed 408 companies between Aug. 18 and Sept. 4.

The sentiments index is up substantially in three of the six sectors measured - manufacturing, professional/technical services, and wholesale. Transportation/warehousing sentiment remains strong (126.0), construction respondents remain pessimistic (68.0), and the oil and gas industry is neutral, at 99.1.

Hirsch said negative sentiment in the construction industry shouldn't be too surprising.

"With the amount of new commercial office space coming on the market, particularly in Calgary, it's clear developers will be less active in the coming months," he said. Residential housing construction is also down significantly from the torrid pace Alberta saw in 2007 and 2008, which might also be weighing down sentiment.

Ted Chambers, a research professor at the Centre, noted the survey also shows businesses expect their hiring intentions to remain flat. That offsets the optimism suggested by the improving sentiments index, he said.

"The good news is the Alberta economy is likely to turn the corner in the upcoming quarter," Chambers said. "The not-so-good news is that unemployment will remain high."

In the medium term, survey results suggest that fully seven in 10 Alberta businesses expect activity to grow over the next 12 months. Some 45 per cent expect activity to increase by more than 10 per cent, while 26 per cent expect it to increase by less than 10 per cent. Two in 10 expect their outputs to remain stable, while 10 per cent expect them to drop.

The complete report is available at www.business.ualberta.ca/wcer. The next ATB Financial Business Sentiments Index(TM) report will be released on December 17, 2009.

About ATB Financial - ATB Financial is the largest Alberta-based financial institution, with assets of $26.5 billion. It provides Personal and Business Financial Services, Investor Services, and Corporate Financial Services to 670,000 Albertans in 243 communities. It provides service through 164 branches and 132 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 has been named one of Canada's 50 Best Employers by Report on Business Magazine, one of the 75 Best Workplaces in Canada by the Great Place to Work Institute, and 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.

SOURCE ATB Financial

For further information: For further information: Todd Hirsch, Senior Economist, ATB Financial, (403) 974-5023, e-mail: thirsch@atb.com; Jason Brisbois, Chief Economist, Western Centre for Economic Research, School of Business, University of Alberta, (780) 492-4104, e-mail: wcer@ualberta.ca


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