EDMONTON, Jan. 19, 2017 /CNW/ – As ATB Financial reported last month, optimism among Alberta entrepreneurs is on the rise. Still, the economic downturn has had a significant impact on a majority of small and mid-sized enterprises (SMEs) in the province. According to the latest ATB Business Beat survey, many Alberta SMEs have had to adapt to the times by changing the way they do business.
Some of the changes businesses have made to make it through the downturn included:
- Cutting down on discretionary spending (67 per cent, up 23 per cent from last year).
- Changing business processes to increase efficiency and productivity (61 per cent, up 20 per cent from last year)
- Postponing plans to purchase new equipment (53 per cent, up 24 per cent from last year)
- Reducing pricing to meet customer demands (51 per cent, up 28 per cent from last year)
- Freezing wages or bonuses (47 per cent, up 24 per cent from last year)
- Reducing employees’ regular or overtime hours (47 per cent, up 23 per cent from last year)
- Laying off staff (38 per cent, up 20 per cent from last year)
“Alberta business owners are resilient. They recognize they need to be creative and purposeful in making changes that allow them to be profitable in the short and long terms,” said Teresa Clouston, ATB’s Executive Vice-President, Business & Agriculture. “The actions they take will help them get through the tough times and they’ll be in a much better position when things do turn around.”
Almost three quarters (72 per cent) of Alberta’s SMEs say that the recession has had a somewhat or very negative impact on their businesses. Among energy companies, 67 per cent viewed the economic downturn as having a very negative effect.
Reduction in revenue was the most common negative impact on businesses, with 47 per cent of SMEs reporting lower revenue as a result of the recession. Difficulty keeping and acquiring new customers (18 per cent), impact of energy industry downturn (14 per cent), and high unemployment leading to less consumer spending (13 per cent) were other negative impacts experienced.
Some SMEs experienced positive impacts as a result of the downturn. Of those surveyed, 19 per cent said the large pool of qualified candidates for new positions was positive, followed by increased company efficiency (13 per cent) and increased revenue (12 per cent). However, 36 per cent of respondents said they couldn’t think of any positive impacts for their businesses.
“The difference of impact from last year is significant,” added Clouston. “The good news is with oil prices stabilizing, we are starting to see signs of renewed optimism and growth.”
The ATB Business Beat survey is conducted four times per year to take the pulse on small and mid-sized Alberta-based businesses.
For the complete Business Beat survey results, click here.