What a time to be alive. The provincial economy has never been stronger. Our GDP is growing faster than any other province. Our population is hitting all-time highs. Interest rates are unprecedently low allowing consumers to spend, buy and invest. Have things ever been better, and how long will this momentum last?
A casual observation would indicate things are on a roll, maybe even a tear. But a deeper examination may indicate an unconventional current.
There are certain casual topics that open Island conversation, like the weather, what's new and the latest in business. I am finding an awkward tension on the last topic. So much so, that I have begun to question prevailing sentiment on the state of the broader economy.
Despite strong economic indicators, I am observing a subtle undercurrent of aggravation. While many measures of economic indicators are strong, daily measures of stress seem challenged. Is there a conflict occurring? Is this an unusual test measure? Is there a quiet frustration bubbling?
In January the Canadian Federation of Independent Business (CFIB) released their “business barometer”, a survey that captures optimism and business confidence. This data supports what I have been observing anecdotally. There is a measured change in general sentiment on the Island.
This time of year, sentiment can be attributed to harsh weather, business seasonality, polarized politics but I believe this shift is something deeper. Just like the economy, P.E.I.’s general sentiment remains the highest in the country. Not surprising considering the strength we have enjoyed.
But inexplicably our Island business sentiment also experienced the largest per centage drop across any province. A month over month change of 8.8 per cent. The next largest monthly decline was New Brunswick with at 3.3 per cent decline. This shift is significant. What is driving this change when things are so good? Is it a trend or an anomaly?
Last autumn, the Bank of Canada also did a Business Outlook Survey. Atlantic Canada is a blended region in the responses, but here too there was a marked decline in overall confidence.
Business confidence measures should be an important barometer for politicians to observe. Governments want to maintain positive momentum and hopefully the upcoming budget will offer inducements to continue catalyzing enterprise. Oppositions look to capitalize on this wedge with assurance of better policies.
As businesses struggle with access to skilled labour, motivating employees, managing rising input costs and smothering taxation burdens, enterprises ability to invest and grow the economy will arguably start to peak as we approach the fourth quarter of this calendar year.
I believe the time for policy intervention is exactly now; as we wait anxiously on the first budget of this new government.
Blake Doyle is The Guardian’s small business columnist.