TORONTO, Oct. 19 /CNW/ - Business confidence in Alberta has substantially improved for the second consecutive quarter, according to the latest PricewaterhouseCoopers (PwC) Confidence Index compiled by Leger Marketing, indicating that business leaders continue to be optimistic about the economic conditions after the recent downturn. Overall, consumers continue to see advantage in the future unemployment rate; however, all other indicators have leveled or dropped compared to July 2009.
The new results show that the current business condition has seen a significant rise - to 96 points - since hitting a low of 22 in March 2009. The future business condition has fallen since May 2009 (186 to 166 points) but continues to reflect the highest level of optimism out of all indices measured.
The future unemployment index (116 points) continued its upward trend from a low of 25 in January 2009, indicating growing optimism in the job market. Further, the future interest rate index continued to trend downward in September 2009 (64), from 160 in November 2008, suggesting that business owners believe that as the economy improves, interest rates are likely to go up.
"Business leaders are feeling more positive about current economic conditions," says Ian Gunn, Partner and Leader of PwC's Private Company Services Practice in Alberta. "Even though there have been some tough times there has also been resilience and companies used the downturn as a reality check to improve their efficiencies and build on their core strengths."
However, there has been a drop in the fiscal conditions measure (90 in September 2009, 103 in July 2009), suggesting that Alberta businesses are less optimistic that fiscal conditions in the next 12 months will be better than they are at present.
According to the study, consumers are less confident with the consumer confidence index falling slightly (112 in September 09, 117 in July 09) after a continual rise beginning in January 2009 (103). However, the future unemployment index continued to move up from a low of 34 in January 2009 to 97, reflecting growing consumer optimism about the job market. This index has not crossed the 100 mark since May 2008.
The future household income index remained at a level fairly consistent with that seen over the past year. The future interest rate measure continued to decline (64 in September 2009, 79 in July 2009) and is consistent with the sentiment of business leaders that as the economy improves, interest rates are likely to go up. "As consumers look ahead to economic recovery, there are increasing concerns about interest rates rising", says David Bryan, PwC's Edmonton Private Company Services Leader. "While this is still seen as a good time to make major purchases such as a house, consumers are expressing somewhat more caution now then they have in the past few months."
The 'buying a house' index has dropped off since July 09 (153 in September 2009, 164 in July 2009) but reflects the highest level of optimism of all indices measured. Buying major household items remained steady (125 in September 09, 129 in July 09).
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