Small business optimism down in August, but not out
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Business Barometer
Full report
September 2011
Ted Mallett, Vice-President & Chief Economist
Small business confidence took a sizable hit in August as owners digested a string of bad news about world economy in the first half of the month. CFIB's Business Barometer Index dropped to 61.7 last month from its July level of 68.3-the lowest reading since July 2009. These results are not altogether unsurprising. The raucous debt ceiling debate in the US and turmoil that followed in equity markets worldwide rightly caused business owners to pay attention to their own planning. But of note, although confidence suffered, owners' views of actual current business conditions held up reasonably well.
CFIB Business Barometer Index and GDP
The balance of opinion on how respondents' businesses are doing now compared to three months ago is still trending upward. And, although the perspective on the next three months fell somewhat, the balance of opinion is still net positive and in line with survey results this time last year.
Indications of the current state of business operations, such as new orders, unsold inventories and use of staff overtime all regressed in August, but mainly correcting for what had been very strong July measures. Furthermore, they all remain well above what we had seen during the 2009 recession and through its early stages of recovery.
