Latest data on sentiment among Calgary businesses show that optimism levels remain high, cost-related pressures are easing but confidence in supply chain stability has tumbled
Calgary, AB, October 1, 2024 – For the third straight quarter, optimism among Calgary businesses has held steady. According to the Q3 Canadian Survey on Business Conditions, conducted by Statistics Canada in collaboration with the Canadian Chamber of Commerce, more than three-quarters (78%) of Calgary businesses report that they are optimistic about the year ahead, 5% higher than the national average.
“We are pleased to see optimism levels among Calgary businesses continue to be strong and steady. With inflation aligned to its 2% target and the Bank of Canada’s continued rate cuts, businesses are feeling some relief in cost-related pressures and that is likely driving these positive optimism levels,” says Ruhee Ismail-Teja, Vice President, Policy and External Affairs at the Calgary Chamber of Commerce. “However, we are concerned that businesses are losing confidence in our supply chains, likely due, at least in part, to recent labour disruptions in rail, air and ports. We continue to ask governments for support in ensuring our critical supply chains can continue to function – so businesses and Canadians alike can access the goods they need.”
Larger firms more optimistic than small firms
Companies with 1 to 4 employees are 11% less optimistic than those with over 100 employees. For many, access to capital, ability to take on more debt and access to labour have been critical and persistent challenges. Small firms, however, are 21% more optimistic than they were this time last year.
“Small businesses are the lifeblood of our communities, and while we are encouraged that the majority are optimistic, it is critical that we continue to support them in their growth. That means increasing access to capital, addressing labour concerns and stabilizing supply chains. As we celebrate Small Business Week in a couple of weeks, it is important to shed light on these challenges, celebrate our small businesses and continue to commit to their success,” says Ismail-Teja.
Cost-related pressures easing
In our analysis of Q2 business conditions, more than 60% of businesses were concerned about inflation and 47% were concerned about rising interest rates and debt costs. However, over the past quarter, inflationary pressures have eased, prompting the Bank of Canada to begin cutting interest rates. As of the Q3 Survey on Business Conditions, concerns over inflation and interest rates have dropped to 54% and 28%, respectively.
“Rising costs have been top-of-mind for businesses for nearly half a decade and this data shows that the recent interest rates are working. However, the true impact of rate cuts on inflation has not yet been realized, as it takes time for policy decisions to work their way through the economy. As such, we anticipate that cost-related pressures will continue to ease,” says Ismail-Teja.
