New data from the Canadian Federation of Independent Business (CFIB) shows that many Alberta small businesses are growing more optimistic as the new year approaches, while almost a quarter are at risk of closing.
According to CFIB’s Small Business Recovery Dashboard, 24% of small businesses in Alberta are at risk of closing — the highest rate in the country.
Manitoba followed Alberta with 20% of its small businesses at risk of closing, followed by British Columbia, Ontario and Prince Edward Island with 19%.
CFIB Alberta Director Annie Dormuth told PKBNEWS that the retail, agriculture and construction sectors have felt the greatest impacts.
“All these compounding challenges and a slow economic recovery,” Dormuth said. “Every business owner thought the end of 2022 was going to be a big economic boom…it just wasn’t.”
The data showed that 54% of small businesses in Alberta have not returned to pre-pandemic or normal revenues.
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Nationally, small business owners have a more optimistic outlook for 2023 than they did last month, but near-term confidence is waning.
CFIB’s Small Business Confidence Indicator showed short-term confidence in Alberta’s small business economy at 44 index points, relatively unchanged from last month. The long-term confidence index rose nearly three points to 52.9 index points.
Dormuth said the near-term lack of confidence among small business owners in the province is due to uncertainty about what the first few months of the year will bring.
“All of this is compounded by challenges, in the form of rising interest rates and inflation,” Dormuth said. “All of this puts a lot of uncertainty on business owners.”
In Edmonton, this uncertainty has created new challenges for Paul Shufelt, who is the chef and owner of Robert Spencer Hospitality.
The group offers catering and has four restaurants, and has gone through a difficult year 2022.
“The pandemic seems to be easing a bit, we will get back to normal. Oh wait, now we have major supply chain issues, staff shortages. If that’s not enough, we have inflation and the cost of doubling or tripling everything – if you can find it in the first place,” Shufelt told PKBNEWS. “It’s sort of death by 1,000 cuts.”
The company, Shufelt said, works daily on a delicate balance of charging enough to keep the doors open, while maintaining fair prices for their customers.
Although there is hope that January 2023 will be better for business than the year before, with pandemic health measures now relaxed, Shufelt said there were still worries about an “imminent recession”. and interest rate increases.
“It’s apprehension,” he said. “He’s always looking for that light at the end of the tunnel.”
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However, there is “moderate” optimism at Madame Premier, a retail store in Calgary’s Inglewood neighborhood.
Its founder, Sarah Elder-Chamanara, said the year had been tougher than expected, but sales had improved with a return to normal, especially on Black Friday and during the holidays.
“December is such a critical month for retailers,” she told PKBNEWS. “Our performance in December is a barometer of the strength and confidence we can have for the new year.”
The company has not taken on pandemic debt like many others in the province.
CFIB data showed that two-thirds of small businesses in Alberta are still working to pay off debt incurred during the COVID-19 pandemic.
But Elder-Chamanara noted that support for small businesses is still as needed as it has been in the past two years.
“It was a little disappointing over the festive period because in this return to normal we lost that focus on the local store; there’s been so much emphasis on it during the pandemic,” she said. “Now that the world is open again, that focus on the local should always be there.”
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