Alberta businesses fear a decline in consumerism as the price of oil continues to drop

CALGARY, Dec. 19, 2014 /CNW/ - With the recent decline in oil prices Alberta businesses are fearful that this economic dip within our primary market will negatively affect consumerism. In an effort to offset competition, 54% of Alberta establishments will focus on cultivating their methods in which they target their customers according to PwC's latest Business and Consumer Confidence Index.

Reynold Tetzlaff, PwC's National Energy Leader, says, "The drop in oil has caused uncertainty in the market. As a result, this uncertainty will trickle down to business and consumers alike, especially in Western Canada."

Consequently, consumers are concerned about future unemployment rates, but despite the pessimism about the economy (58%) still plan to spend similar amounts on holiday shopping and (9%) will exceed what they had in 2013.  

On average, Albertans plan to spend $942 on Christmas shopping this year.

Continuing focus on competitive performance
Understanding and identifying how to best target consumers and improving on performance are the highest priorities for Alberta business as we head into a less stable economic period.

Business and consumer confidence
The overall index decreased by 10 points and the confidence in fiscal conditions index decreased sharply with a 9.7% decrease since September 2014. Fiscal conditions refer to the undetermined economic future of the province – Changes in oil prices could be one of the factors that have reduced businesses' confidence in this index.               

Overall business confidence has decreased sharply with drops across most indices with the exception of future interest rates which remain steady; future unemployment saw a 18.5% decrease, future business conditions a 3.7% decrease and current business conditions a 6.3% decrease.

Overall confidence in the economy has decreased among consumers, although not as severely as Alberta businesses. Since September 2014, consumers' confidence in the economy has dropped. There is a decline in most indices, particularly the future unemployment rate index (19.4% decrease) and buying a house index (5% decrease). Future index rates and future household income indexes remain steady.

About the bimonthly PwC Business and Consumer Confidence Index
The Index determines the level of confidence business leaders and the public have in the economy, now and for the future. It does this by tracking several indices. The indices we look at are:

• future interest rate
• future business conditions
• future unemployment
• current business conditions
• fiscal conditions

About PwC's Energy Services
In a continuously changing global economy, Canadian energy companies are presented with exciting opportunities to grow their business. But with new opportunities comes unique challenges that busy oil and gas organizations may not have the time or resources to manage. We can help. Our Energy practice has been around for more than 100 years providing support in the areas of Audit and Assurance, Consulting and Deals, and Tax. We structure and align our services around industries so that our teams can provide best practices and advice. For more information on PwC Alberta and our energy services, please visit www.pwc.com/ca/DoingBusinessinAlberta

Follow PwC on Twitter at @PwC_Canada_LLP and on Facebook at www.facebook.com/pwccanada.

About PwC Canada
PwC Canada helps organizations and individuals create the value they're looking for. Our 5,700 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 184,000 people in 157 countries. Find out more by visiting us at www.pwc.com/ca.

© 2014 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved. PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

SOURCE: PwC (PricewaterhouseCoopers)

Deseree Kuzek, T: [phone], Email: [email protected]