While Alberta’s economic growth is expected to continue in the first quarter of 2007, according to the most recent ATB Financial Business Sentiments Index(TM), the growth will moderate slightly from levels attained in 2006.
“A majority of Alberta firms expect increased sales in the coming quarter,” says Dr. Bob Ascah, Vice President at ATB Financial. “These expectations of improved business are evident across all sectors, but are most apparent in professional and technical services.”
There is a continued strong demand for labor, as indicated by the Index of Hiring Intentions. At 129, the index is slightly lower than in previous quarters due to seasonality. “The responses signal that intentions remain positive but they are moderately lower for oil and gas, construction, transportation and warehousing, and wholesaling,” says Ascah. “The shortage of labour is once again the most limiting factor affecting business activity.”
For the first quarter of 2007, the Business Sentiments Index(TM) stands at 140.2, compared with the record high of 163.1 indicated in the last survey, for the fourth quarter 2006. The results show that businesses expect to see continued strong growth in the first quarter, although it is reduced somewhat from the growth during 2006.
“Business confidence continues to be strong in Alberta, according to this research,” says Dr. Ted Chambers, Research Professor, Western Centre for Economic Research, School of Business, University of Alberta. “The emerging patterns in this expanding database of results show consistency with other research.”
For the first time it is possible to compare data on a year-over-year basis. Several issues stand out. For example in the construction sector, in the first quarter of 2006, respondents indicated they had about 9 months work on hand whereas in 2007, 7 months of work are on hand. In contrast, 57% of construction sector respondents expect prices to rise in the first quarter of 2007, while only 46% foresaw price rises a year ago. In the Wholesaling sector, 23% of respondents view current levels of inventory as more than sufficient versus 10% a year ago. “These year-over-year comparisons support the view that the pace of growth will moderate,” said Dr. Chambers. (Canada NewsWire Ltd.)