Business Barometer®: optimism among small biz steady in September
Ted Mallett, Vice-President & Chief Economist
Canada’s small and mid-sized business optimism has been steady in September. CFIB’s Business Barometer® Index is holding at 65.6, only a fraction of a point from August’s 65.5. Both readings suggest the overall economy is growing at a moderate pace.
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.
As in the previous month, business owners in Newfoundland and Labrador remain the country's most optimistic, maintaining an index level above 74. Alberta owners are only a half-step behind at a robust 73.8. Optimism in British Columbia (70.9) and Saskatchewan (68.2) bumped upward as well this month, rounding out the top-four. In the Maritimes, we have seen a strong rebound in Nova Scotia business sentiment (to 63.5) at the same time as sharp downdrafts in New Brunswick (59.8) and PEI (53.8). Results for Ontario and Quebec are largely unchanged, with index levels at 65.2 and 60.5 respectively.
The most optimistic industry sectors include health and education, retail and manufacturing—a diverse grouping that also suggests underlying economic stability.
Other indicators from the survey also point to gradually improving conditions. Employment plans are following normal seasonal patterns, but also show long-term improvement. Nineteen per cent of owners are expecting to take on more full-time staff in the next few months, while only 8 per cent plan to cut back. More than 80 per cent of business owners also consider order books and accounts receivables to be normal or better than normal—the highest proportions yet seen in the current business cycle. Future wage and pricing plans are 1.7 and 1.8 per cent respectively—close to Bank of Canada’s 2 per cent target.