Business confidence Index crosses the 100 mark first time since May 2008

TORONTO, - For the first time since May 2008, the Alberta Business Confidence Index from PricewaterhouseCoopers (PwC) conducted by Leger Marketing has crossed the 100 mark. The overall Business Confidence Index is 101, up from 91 in March 2009 suggesting that business leaders are slowly becoming optimistic about the economic conditions.

Two measures that continue to increase since January 2009 are the future business conditions measure (from 144 in January 2009 to 173 in March 2009 to 186 in May 2009), and the future unemployment measure (from 25 in January 2009 to 52 in March 2009 and to 91 in May 2009).

"These figures are promising and indicate that many Alberta businesses anticipate that while the economy is struggling today, there are signs of expected improvement by the fall and into next year," says Ian Gunn, Partner and Leader of PwC's Private Company Services Practice in Calgary.

"According to the Index, future interest rates are expected to start to climb," says Barry James, Managing Partner for PwC in Edmonton. "The Index is down 48 points since January 2009 (134 in January 2009, 94 in March 2009, 86 in May 2009). This is indicative of the fact that with the economy looking promising, low interest rates are not likely to continue being offered."

Meanwhile, Consumer Confidence also continues to rise since January 2009 (103 in Jan 2009, 110 in March 2009 and 116 in May 2009), reflecting an increased belief that the housing and retail markets are favouring the consumer. Consumer optimism was highest in terms of buying a house and purchasing major household items. Buying major household items saw a 33-point gain from 99 in November 2008 to 132 in May 2009. Buying a house surged 50-points from 107 in November 2008 to 157 in May 2009. The future household income index increased 6 points.

Further supporting the optimism is the expectation of improved job prospects. Although still somewhat pessimistic with a score of 81 on scale of 100, the future unemployment rate is up sharply from the last survey (57 in March 29).

"Consumers are feeling more positive on all fronts, from getting a job to buying a house and major household items to increasing household incomes," notes Gunn.