Business Barometer® Small business confidence dips again in July, now at a three-year low
Toronto, August 1, 2012 – Optimism among Canada’s small- and medium-size businesses continued to decline in July, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer® index dropped from 62.1 in June to 60.9, its lowest reading since July, 2009.
“The major difference between now and two years ago was that the index was trending in the opposite direction, towards greater confidence,” said Ted Mallett, CFIB’s chief economist and vice-president. “The index’s current position against GDP puts it very close to the zero-growth mark, suggesting Canada’s economy is nearing a standstill.”
Business owners in Saskatchewan (72.0) and Alberta (70.3) are the most optimistic, although only Newfoundland and Labrador (63.3) experienced an increase from June as index levels fell in every other province. New Brunswick (64.8) and Manitoba (64.5) are above the national average, while the three biggest provinces, British Columbia (60.5), Ontario (60.1) and Quebec (58.1) are slightly below. Index levels in Nova Scotia (54.0) and Prince Edward Island (52.7) are the country’s lowest.
“Retailer optimism took a big tumble in July and has joined the hospitality and personal services sectors in the sub-60 club—suggesting that consumers are getting cautious with their spending,” added Mallett.
The one bit of good news is a rebound of hiring expectations: 20 per cent of business owners plan to hire full-time staff in the next three or four months (up from 15 per cent in June) compared to 12.8 per cent who say they will cut back (up from 12 per cent). This is a strong reading for the middle of summer. Overall, 42 per cent of business owners described their state of business to be in “good” shape, nearly three-times the 13 per cent who said their state of business is “bad.”
Measured on a scale of 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 70 when the economy is growing at its potential. The July 2012 findings are based on 839 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.4 per cent 19 times in 20.
For more information or to arrange an interview with Ted Mallett, contact Gisele Lumsden or Meghan Carrington at 416 222-8022 or email email@example.com
As Canada’s largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.