Ted Mallett, VP and Chief Economist
Small business optimism moved up slightly in November, but has remained within a narrow horizontal track since this past April. CFIB's Business Barometer Index now stands at 59.4, up less than 2 points over October's 57.7.
Movements in the index across the provinces were balanced, rising in five and falling in five—including those with the least optimistic business owners: Alberta (37.3), Newfoundland & Labrador (42.3) and Saskatchewan (51.3). Leading optimists again were owners in Prince Edward Island (71.4) and British Columbia (69.0), both with improving sentiment over October readings. Optimism in the rest of the country showed more consistency with index levels ranging in a narrow five-point range: Nova Scotia (64.9), Quebec (63.8), Manitoba (63.2), Ontario (62.2) and New Brunswick (59.4).
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 among industry groupings showed a narrower range this month. There were no standouts, with hospitality business owners showing the highest index at 64.6, followed very closely by those in professional services, financial services, health services, manufacturing and retail. The sectors with weakest optimism were natural resources, construction and personal services.
Opinions on the general state of business health remained stable, but the 38 per cent who say their businesses were in good shape is low compared to past years. The same relative weakness could be said of order books and the state of accounts receivable. Expectations for wage and price growth remained near 1.5 per cent on an annualized basis, but employment plans stayed weak, with 20 per cent of owners expecting to reduce full-time staff levels compared to only 15 per cent who plan to increase them.