Alberta Business Sentiment: Down But Not Out

    CALGARY, Dec. 19 /CNW/ - Business sentiment in Alberta is the lowest it
has been in over two years, according to new data released today by the
Western Centre for Economic Research and ATB Financial. The ATB Financial
Business Sentiments Index(TM) surveys over 400 companies throughout the
province to gauge their opinion and sentiment for the coming quarter. The
sentiment index for the first quarter of 2008 stands at 124.7 - that is down
from 140.2 in the first quarter of 2007, and 149.7 in the first quarter of
2006. (An index value of above 100 indicates positive sentiment, and below 100
indicates negative sentiment.)
    "Alberta's economy is clearly moderating-that has been evident in most of
the economic indicators throughout the fall, and is confirmed with the
Business Sentiments Index released today," says Todd Hirsch, the Senior
Economist at ATB Financial.
    The sentiments index for the first quarter of 2008 is down in all six
sector groupings in the survey, but the steepest drop was recorded in the oil
and gas sector. Its index value fell from 157 in the last quarterly survey to
111 for this quarter. Sentiment in the construction sector was also lower, but
its drop was the smallest among the sectors.
    Despite the fact that the overall index is at its lowest point since the
Business Sentiments Index has been tracked, the provincial economy is still in
good shape. "We have to keep some perspective," says Hirsch. "We are coming
off of two extremely strong years in Alberta, so some moderation was
inevitable." The overall index value of 124.7 - and all eight sector index
values as well - are all well above the neutral value of 100. That means the
economy is still expected to grow in the first quarter. "Most other provinces
would be very happy about an overall business sentiment index of 124.7," adds
    The high value of the Canadian dollar, uncertainty around the changes to
the royalty framework, and softness in the natural gas sector are factors that
may be contributing to a slower economy and a lower index.
    "The Business Sentiments Index also provides some regional perspective of
the economy," says Dr. Ted Chambers, Research Professor, Western Centre for
Economic Research at the University of Alberta School of Business. Sentiment
in northern Alberta (including Edmonton) posted an index value of 131,
considerably higher than the index value of 118 in Calgary and southern
Alberta. This is explained primarily by the robust activity in the oilsands as
contrasted to the slower natural gas activity in the south. "The oil sands
will continue to be for some time one of the foundations of Alberta's economic
growth," says Chambers.

    About the ATB Financial Business Sentiments Index(TM)

    The ATB Financial Business Sentiments Index(TM) is compiled by the
Western Centre for Economic Research at the University of Alberta's School of
Business. It was commissioned in late 2005 as a tool to evaluate the
intentions of Alberta business. The Index is developed from the findings of a
WCER/ATB poll conducted from November 19 to December 5, 2007. For the survey,
a representative sample of over 400 Alberta businesses in key industries is
interviewed by telephone. With a sample of this size, the results are
considered accurate to within +/- 5 percentage points, 19 times out of 20. The
margin of error will be larger within regions and for other sub-groupings of
the survey population.

    About ATB Financial

    ATB Financial is a leading full-service financial institution based in
Edmonton, Alberta, Canada. ATB serves over 600,000 Albertans in 244
communities through 157 branches and 134 agencies, as well as a customer
contact centre in Calgary, Alberta. Services are also available through
automated banking machines and online banking. A wide range of wealth
management products and services are provided under the banner of ATB Investor
Services. For further information on ATB Financial, please visit our website

    About the Alberta School of Business, Western Centre for Economic

    The Western Centre for Economic Research (WCER) monitors the performance
of Western Canada's economy, its policies and programs, and implications for
business enterprises. Drawing on a wide range of expertise, the 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. For further information
please visit our website at

    For the full results, please visit the Western Centre for Economic
Research web site at

For further information:

For further information: Todd Hirsch, Senior Economist, ATB Financial,
(403) 974-5023,; Jean Frost, Research Assistant, Western
Centre for Economic Research, School of Business, University of Alberta, (780)

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