Business Barometer®: Small biz optimism buds in April
Ted Mallett, Vice-President & Chief Economist
Small business confidence warmed noticeably in April. CFIB's Business Barometer® Index is a point and a half higher this month, rising to 65.7—its best result since last November.
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 rose in 6 of 10 provinces, especially in Saskatchewan (73.0) which recaptured top placing nationally this month and Ontario (67.7), which is now fully two points above the national average. Small gains were also seen in British Columbia (71.9), Newfoundland & Labrador (68.5), Manitoba (63.7) and New Brunswick (57.6). Optimism was down in Alberta (70.7), but still at robust levels by national standards. Unfortunately, areas of weakest optimism did not see improvement this month—including Quebec (58.3), Nova Scotia (56.9) and Prince Edward Island (56.1).
Sector profiles are relatively close together on the optimism scale. Improvements were notable in agriculture, natural resources, construction and manufacturing. Unfortunately we saw a little less optimism in the consumer-side sectors—retail, hospitality and personal services.
Signals from other indicators remain mixed. Unfilled orders and accounts receivables are on the weak side, as is the only 37 per cent who say their general state of business is ‘good’. On the other hand, the 61.9 per cent who plan to make capital spending and the 28 per cent who expect to add to full-time staffing levels in the next three or four months are both post-recession highs.