Business Barometer®: Small business optimism rebounds in central Canada
For more details
Business Barometer
Full report
Toronto, August 3, 2011 - Following two months of slippage, confidence among Canada's small and mid-sized businesses rebounded in July, rising two points to 68.3-about the same level it had been holding earlier in the year, according to the monthly Business Barometer from the Canadian Federation of Independent Business (CFIB).
"For the most part, it appears Canadian business owners are not seeing much turbulence from the sovereign debt uncertainties in Europe and the U.S," remarked Ted Mallett, vice-president and chief economist for CFIB. "Measures for new orders, inventories and overtime are up, compared to past months, and investment intentions have improved in all categories except vehicles."
CFIB Business Barometer Index and GDP
The wide divergences in optimism across the country seen earlier this year appear to be coming back into balance. Although still leading, confidence is down slightly in the West. In the central provinces, prospects appear to have brightened. Alberta businesses are still the most optimistic, and now the only province with an index score over 70. Prince Edward Island and Nova Scotia businesses are at the other end of the scale-in the low 60s.
The industry profile generally shows the same pattern of balance, with only the business services and transportation sectors showing performance above 70, with most of the rest remaining near the national average. That being said, business owners in the agriculture and hospitality sectors continue to have the least buoyant outlooks.
Short-term employment plans are also quite positive-with 18 per cent of business owners saying they will add to full-time staff levels in the next three or four months, versus only 10 per cent who expect to cut back. The eight-point difference is the largest we have seen for this time of year.
Concerns about the price of energy remain the biggest cost concern for owners, but that too has moderated in recent months. "The result is that future pricing plans have come back below the two per-cent mark, which the Bank of Canada considers to be the fulcrum of its monetary policy levers," concluded Mallett.
Measured on a scale between 0 and 100, an index level above 50 means owners expecting their businesses' performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing. The July 2011 findings are based on 931 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.2 per cent 19 times in 20
For more information or to arrange an interview with Ted Mallett, contact Gisele Lumsden at 416 222-8022 or email public.affairs@cfib.ca
As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by EntrepreneursTM. Established in 1971, CFIB takes direction from more than 108,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.
