Vaccines are fuelling economic optimism among business leaders in Alberta and employers expect to go on a hiring spree and invest more money into their operations in the coming months, according to a survey of about 45 large enterprises.
The Business Council of Alberta said 83 per cent of respondents in its most recent quarterly survey report an uptick in economic indicators such as new orders, advance bookings and sales inquiries. In the previous quarter, about 25 per cent of respondents reported new business activity. This shift has the majority of employers in the survey looking for more labourers, according to the council.
The coronavirus, coupled with soft energy prices, crippled Alberta’s economy over the past year. U.S. President Joe Biden’s rejection of the Keystone XL pipeline added further pessimism. The glut of office space in downtown Calgary continues. But now, as more people receive vaccines, businesses leaders are preparing for a burst of economic activity.
“Alberta businesses are clearly primed to go,” said Mike Holden, the chief economist at the business council. “It is a long and hard road to recovery, but it looks like we are going to be out of the running blocks quickly.”
Roughly 55 per cent of the survey’s participants expect to increase employment over the next year, compared to 25 per cent in December. Another 30 per cent expect their head count to hold steady, while 15 per cent expect to cut staff, the survey found. More businesses in the survey intend to jack up spending this year compared to those who expect to dial back, although 20 per cent of the survey’s participants said they are having trouble accessing credit. Mr. Holden said this difficulty is in line with previous results.
Alberta’s seasonally adjusted unemployment rate clocked in at 9.9 per cent in February, down from 10.7 per cent in January, and up 2.4 percentage points from February, 2020. Meanwhile, the unemployment rate across the country hit 8.2 per cent this February, compared to 5.7 per cent in the same month a year ago.
But despite high unemployment, businesses are struggling to find people to fill job openings, the business council said. About 36 per cent of survey respondents said it is difficult to find candidates, compared to just 11 per cent who reported the same in December. The council attributed this in part to a gap in skills, child care and education responsibilities, and health and safety concerns.
Bryce Tingle, a corporate law professor at the University of Calgary, believes the survey’s optimism is warranted. The markets in the United States are soaring, for example, and household savings climbed for those who held on to their jobs through the pandemic.
“There’s a widely held feeling that with the arrival of the vaccines, we are going to get ahead of this pandemic,” he said.
Prof. Tingle, along with the business council, noted that while economic indicators suggest a turnaround, Alberta’s starting position is ugly. “All of this is in the background of a province that has been flat on its back since 2014,” he said.
Kristen van de Biezenbos, a professor at the University of Calgary’s Haskayne School of Business, is more tepid than the council. The vaccines, she said, brought hope, but Alberta lacks clarity on when the general population will receive doses. Further, COVID-19 cases in Alberta and other provinces are on the rise as the more transmissible and deadly variant strains spread.
Alberta has said it expects all eligible adults to receive their first shot by the end of June. Alberta has administered 707,482 vaccine doses as of Sunday, and 116,198 people have received two doses. Alberta counted nearly 4,000 new COVID-19 cases over the first four days of April, and 39 per cent of all active cases stem from variants, according to data released Monday.
“There’s a lot of concern that if we don’t see the pace of vaccination pick up, this might not come to an end as quickly as we would like to,” Prof. van de Biezenbos said.
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