Business Barometer®: small biz confidence up in August
Ted Mallett, Vice-President & Chief Economist
Canada’s small and mid-sized business owners are feeling more upbeat in August. CFIB’s Business Barometer® Index has gained more than two points over top of July’s sluggish performance, closing off the month at 65.5—its third-best reading so far this year after April and May.
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.
Business owners in Newfoundland and Labrador remain the country's most optimistic, maintaining an index level above 72. Albertans are close behind, about a point behind. Although optimism in British Columbia faded slightly, its index remains above the 70 mark for the 11th straight month. Sentiment in Ontario and Saskatchewan rebounded slightly to near 65, just under the national average. Optimism improved in New Brunswick to near 63, while in Manitoba, the index fell back to that level. Not much change in sentiment was noted in Nova Scotia or Quebec, with their index levels remaining under 61. Prince Edward Island once again has Canada’s least optimistic businesses, with its index sinking to 56.5.
There is generally good news among the other indicators from the survey. Forty-two per cent of owners say their businesses are in good shape, and only 10 per cent reporting them bad shape—the most net positive result seen since the recession. Near-term full-time employment plans are also holding up quite well for this time of year, while unfilled orders and accounts receivables performance have recovered from slumps earlier in the year.
The percentage of respondents citing constraints from skilled labour shortages (38 per cent) is at a post-recession high, while those concerned about domestic customer demand (30 per cent) is at a post-recession low.