Prince Edward Island business leaders are more optimistic about their current and future economic well-being than they were a year ago.
Results of the fourth Atlantic Canada Business Confidence Index (BCI), sponsored by TD, reveal that overall business confidence in Atlantic Canada has changed little over the past eight months, with a notable increase in P.E.I., but stable levels seen in Nova Scotia and New Brunswick, and dropping confidence in Newfoundland and Labrador.
“Results are reflective of what we’re seeing around the region’s economies, and it’s important to continue to hear the views of business leaders in Atlantic Canada,” said Rob Lindstrand, vice-president, TD commercial banking, Atlantic Region.
Results show that those surveyed are more optimistic about the well-being of their own companies than with the state of the provincial economy in general. In fact, confidence in the economic future of the region has declined and it continues to be relatively weak. Businesses do not strongly believe that the state of the economy in Atlantic Canada today has improved, let alone changed, from one year ago, despite small growth in real GDP across all four provinces this past year.
"The relative stability in business confidence in Atlantic Canada belies the considerable variability in confidence by province; with business confidence highest in Prince Edward Island and lowest in Newfoundland and Labrador, mirroring current economic conditions in each of these provinces," said Don Mills, chairman and CEO of CRA.
"The relative stability in business confidence in Atlantic Canada belies the considerable variability in confidence by province; with business confidence highest in Prince Edward Island and lowest in Newfoundland and Labrador, mirroring current economic conditions in each of these provinces."
Companies in Atlantic Canada (except Newfoundland and Labrador) reported revenue growth in the past year and believe it will continue to increase in the coming year, along with capital expenditures.
Despite reported and forecasted revenue growth, most businesses have not changed their staffing levels in the past year and do not intend to do so in the coming year. Employee wage increases were common in 2017, though they are forecasted to be more modest in 2018. With the exception of Newfoundland and Labrador, wage increases were reported by employers to be higher than the inflation.
Atlantic Canadian business leaders expressed a desire for reduced taxes, the continued support of small and local businesses, and leaner, more effective governments that could take a greater leadership role in fostering a more favourable business climate in the region. At the same time, business leaders continue to believe that the private sector is not doing enough to create confidence in the region, with increased collaboration with governments and within the private sector and the support of small or local businesses being the most commonly suggestion actions.
Looking at the region’s workforce, Atlantic Canada continues to show slow population growth and aging residents, more so than other provinces in the country. At the same time, the region is challenged by high unemployment levels that are well above the national average.
This survey represents the fourth iteration of the study. Sponsored by TD, the Atlantic Canada Business Confidence Index is conducted online with business leaders across Atlantic Canada, including representation of companies from all major sectors of the economy and all sizes of organization. In total, 501 surveys were completed between Jan. 22 and Feb. 11, 2018. For more information, visit www.cra.ca.