Business Barometer®: Small business confidence edges down in May
Ted Mallett, Vice-President & Chief Economist
Canadian small business optimism remains cool this spring. CFIB’s Business Barometer® Index shaved a third of a point in May and now stands at 62.1, versus 62.4 in April. Although only a small change, it is the third consecutive monthly decline since February. The index is now at its lowest point since the summer of 2012, when the economy went through a slow-motion act.
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.
Despite a reasonably good outlook for employment and capital investment, there are other general signs of sluggishness. Wage and price expectations are tempering, while there is greater concern about levels of customer demand and the state of order books.
The patterning across the country, however, has been quite uneven. Optimism is once again highest in Alberta, with its index bouncing back to 68.8—just outpointing business owners in Newfoundland and Labrador. Although off a point or two, Saskatchewan and British Columbia are also above the national average. At the other end of the scale, optimism dropped substantially in Nova Scotia and Quebec, pushing their index levels below the 60 mark. Manufacturing, transportation and hospitality are the weakest sectors this month, while the information and financial services sectors are above the norm.