In this week’s EconMinute, we’re talking about Alberta businesses’ hiring expectations.
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It’s been just over a year since the Business Council of Alberta’s inaugural Business Expectations Survey, a tool to assess forward-looking trends in business conditions and economic expectations. In October 2020, the first survey revealed a bleak outlook for Alberta, with the province’s CEOs indicating that economic recovery will be long, slow, and painful.
This negative outlook for future growth meant business hiring expectations were equally bleak. In October 2020, almost half of businesses (45%) expected to employ fewer people over the next 12 months (i.e., lay off workers), while only a quarter of businesses expected to add employees.
Business hiring expectations remained grim through January 2021. But, by April 2021, expectations had improved considerably, with more than half of businesses planning to employ more people over the coming year. Since then, the percentage of businesses expecting to increase their workforce has only increased.
So, what can we thank for this increasingly optimistic outlook?
- When COVID-19 vaccines were first approved at the end of 2020, rollout schedules initially predicted that the general population would receive their first doses in fall 2021. However, thanks to higher-than-anticipated procurement, all Albertans (ages 12+) were eligible to receive their first dose by early May 2021.
- As vaccination rates increased, public health restrictions eased (albeit with some fluctuations throughout the third and fourth waves), and consumer confidence grew.
- Consumer spending started to rebound in March as consumers began to travel and go to entertainment venues again.
- An increase in business confidence shortly followed as high commodity prices lifted business output in both energy and non-energy products.
- By September, energy and non-energy investment grew following a ramp-up in activity and infrastructure expansions.
As the pandemic situation has improved, consumer and business confidence has increased, generating increased demand, and therefore, increased business output and revenues. And as the economy rebounds, businesses expect to expand their workforce. However, though it seems reasonable to assume that the worst is behind us, whether this optimistic trend continues is yet to be seen as we grapple with the effects of emerging COVID-19 variants, commodity price fluctuations, supply chain issues, and labour shortages.