New survey results from Alberta CEOs show the road to recovery will be long
Alberta executives are not a happy bunch these days. The combination of the COVID-19 economic collapse and an oil price war has clobbered the provincial economy. A new survey by the Business Council of Alberta illustrates the havoc wreaked on business confidence. Markham interviews economist Mike Holden about the survey results. The Council’s press release and the link to the full survey results are below.
Business Council of Alberta press release
Alberta, Canada—A new survey of Alberta CEOs from the Business Council of Alberta and Viewpoint Research shows that the leaders of Alberta’s top businesses believe that the road to recovery will be long, hard and winding. 26% are not certain that their organization will survive this crisis until a vaccine is widely available or we otherwise reach herd immunity. The purpose of the survey, which ran May 13-30, was to gauge the impact of the economic shutdown and to gather insights on the expectations business leaders have in the relaunch and recovery period.
“COVID-19 and an oil price crash has severely impacted our economy, with many Albertans unemployed and businesses facing tough decisions,” says Michael Holden, VP Policy and Chief Economist of the Business Council of Alberta. “As we move through our relaunch stages and look towards recovery, we are looking at a long path back. These survey results point to long-term economic and employment impacts.”
According to the survey, 61% of businesses have undergone layoffs, and 18% do not expect to refill any significant number of those positions.
COVID-19 left no business unscathed.
Nearly 90% of the respondents experienced moderate to severe declines in business revenues, and the majority of those have engaged in layoffs. Most of the surveyed businesses responded by doing what they could to survive – cutting costs, pausing projects, performing layoffs, and more. However, many have also adapted – introducing new products or services (25%); shifting operating models to digital (43%); or investing in new projects.
“This survey shows that Alberta business leaders expect a tough and slow road to recovery, but they are also expressing confidence and optimism,” says Kelsey Hahn, Managing Director, Viewpoint Research. “Businesses are adapting, leaders are shifting their mindsets, and with the right environment and supports in place, recovery is possible.”
Government programs have had mixed applicability
“What we found is that even though several government support measures were announced, many have had limited applicability for Alberta businesses,” says Holden. “The notable stand-out is the Canada Emergency Wage Subsidy, which has proven to be a welcome and effective initiative. Of the respondents that had no to minimal layoffs, almost half of them benefitted from the subsidy, saving thousands of jobs, and protecting Albertans from potential unemployment.”
68% of businesses surveyed had already or intend to access the Canada Emergency Wage Subsidy program.
Major hurdles lie ahead on the road to recovery.
Alberta’s economy was challenged before the pandemic and oil price crash, and recent events have hindered recovery efforts already in place. The majority of respondents believe that continued depressed oil prices, a weak global economy, and low consumer demand, are the biggest barriers to returning to pre-crisis operations
The results indicated that both levels of government have a pivotal role to play in reducing these barriers, specifically in stimulating demand, providing clarity around health and safety protocols, ensuring adequate liquidity and cash flow support, and transitioning furloughed employees back to work.
“Relaunch and recovery are different things. We are in the relaunch phase in Alberta and we are now looking at what will be necessary for a strong recovery. One-third of our surveyed businesses indicated that additional or extended support will be essential to a strong and sustainable recovery.” says Hahn.
“What we can be confident of right now is that when things get tough, Albertans get going,” says Holden. “Albertans are resilient and adaptive, and while we are facing a grand challenge, we’re looking forward to working with Alberta’s business leaders, communities and government to ensure that Alberta comes out this stronger than ever before—economically and socially.”
Download the full report at businesscouncilab.com/report-alberta-business-impact-of-shutdown-and-future-recovery