Business Barometer®: Small business optimism highest since beginning of 2013
Ted Mallett, Vice-President & Chief Economist
November shaped up to be a reasonably positive month for Canadian small businesses. CFIB's Business Barometer® Index gained almost a full point, posting a 65.9 this month over October's 65.0. It is also the second highest reading of 2013 after February's 66.2
On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.
Optimism remains strongest in Newfoundland and Labrador (74.7), although we see gains in all four Western Provinces—particularly in British Columbia (72.3). Ontario businesses are showing slightly less optimism, but with an index tracking still very close to the national average. The problem areas continue to be Quebec, New Brunswick and Prince Edward Island, each with index levels at least 10 points below national norms. Sectors are showing less variation however. Healthcare, professional services, resources, information and the arts, retail and manufacturing are all scoring above the average.
Staffing plans have tapered off somewhat this month. Expected full-time hiring plans are no different in November, but there is a slight increase in businesses expecting to cut back staff. It is not unusual to see it rise this time of year, but net hiring looks a little weaker now than the same time in 2012. Business’ order books, however, look good and accounts receivables are not showing a problem on balance. Pricing and wage expectations also each remain modest at an annualized 1.6 per cent change.