Business Barometer®: confidence rebounds in March
Ted Mallett, Vice-President & Chief Economist
March brought in some warmer perspectives from small business owners. CFIB's Business Barometer® Index rose about a point and a half this month, but remains at a subdued 61.5 across Canada.
Perhaps the good news this month is that optimism appears to have halted its slide in the major energy producing provinces. It generally remains low in those areas, but really no worse than February levels. In the rankings by region, small businesses in Alberta (48.1), Saskatchewan (52.7) and Newfoundland and Labrador (56.7), along with those in Manitoba (54.6) occupy the bottom four spots.
We also saw, however, a modest uptick in expectations in the largest three provinces, British Columbia (70.4), Ontario (65.5) and Quebec (59.4), which helped propel the national average upward. There was a little fallback in the Maritime Provinces this month, but as a group they remain more optimistic than the national average. Apart from a jump in sentiment from the construction sector and a further deterioration in the resources sector, we saw little change by industry group. Services businesses tend to be a little more upbeat than those on the goods-producing side.
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.
Generally, hiring plans are following normal seasonal patterns, but are more subdued than past years. Capital spending plans have also downshifted, while pricing plans have seen an upshift likely due to the currency value's effect on the cost of imported products.