Business Barometer®: Small business confidence inches downward in April
Ted Mallett, Vice-President & Chief Economist
Canada’s small business optimism inched downward in April, following on the heels of a larger decline in March. After a promising start to the year, more business owners appear disappointed with their firms’ performance so far this spring. CFIB’s Business Barometer® Index now stands at 62.4, half a point below March’s reading and four points under February’s. Latest levels are now back in line with what we had seen in the final months of 2012 when the economy was exhibiting only lukewarm growth.
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.
A few other indicators are also pointing to softer perspectives. Reports on new orders and accounts receivables are down from recent months, as are concerns about shortages of skilled labour—now reported by 29 per cent of respondents, down from the mid-30 per cent range in late 2012.
The patterning across the country, however, has been quite uneven. Most of the weaker perspectives are centred in the Prairie Provinces, along with Nova Scotia, New Brunswick and Quebec. Optimism in BC however, shows a modest increase, while also inching upward in Ontario. Looking at the results by industry, the biggest declines in optimism are seen in manufacturing and retail, while sentiment among owners of construction, wholesale and business services firms are holding up reasonably well.