Owners of small- and medium-sized businesses in Alberta are more confident than they’ve been in years, but that sense of optimism remains tightly tied to the price of oil, according to the latest quarterly survey from ATB Financial.
Overall, the score on the ATB Business Index, which the bank uses to measure business owners’ confidence in their operations, grew to 66.1 out of 100 for the first quarter of 2017, up from 48.5 in the last survey.
ATB says an index score above 50 points suggests businesses are more optimistic than pessimistic about the future.
Confidence in the overall Alberta economy also surged to 58.4 to start the year, up from 36.1 at the end of 2016.
Those are the largest quarterly increases ATB has seen since it began surveying business owners in 2013.
This graph shows the quarterly index scores from 2013 to 2016:
The latest survey found business owners in the energy sector to be even more optimistic, with a confidence index of 74.3 — the highest level the bank recorded since the second quarter of 2014.
The manufacturing and retail sectors were the next highest with scores of 74.1 and 71.4, respectively.
Despite the encouraging signs, ATB struck a note of caution.
“Confidence continues to be directly linked to the price of oil,” Teresa Clouston, the bank’s executive vice-president of business and agriculture, said in a release.
“The latest index results confirm that many businesses have weathered the storm and are looking forward to the future, however it also means confidence may be fickle if the price continues to fluctuate as it has recently.”
ATB plans to release the full results of its first-quarter survey next month.