National small business confidence kicks-off 2010 on a positive note
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Business Barometer
Full Report
February 2010
Ted Mallett, Vice-President Research & Chief Economist
Small business confidence improved in January, recovering most of the ground it had lost a month earlier. Confidence is now almost equivalent to levels seen in the September-to-November 2009 period—indicating continuing modest growth in the economy. The Business Barometer index now stands at 66.9 for January, which is equivalent to an expected GDP growth rate in the 2.0 per cent to 2.5 per cent range.
CFIB Business Barometer Index and GDP
Measured on a scale between 0 and 100, an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing.
Confidence improved in 10 of 13 industry categories. The most optimistic business owners continue to be in professional and business services, along with healthcare and education services—the only sectors with index levels above 70. The least optimistic business owners are in the agriculture, primary industries and restaurant and accomodation sectors—all with index levels well below 60. The good news for the month is a solid improvement in optimism among construction, manufacturing, wholesale and transportation companies, which is signalling a strengthening industrial turnaround. Changes in business optimism across the regions are a little more balanced, with only 5-in-10 provinces showing improvements. Business owners in Nova Scotia, British Columbia and Saskatchewan are the most confident in January, pushing index levels above 70. In contrast, owners in Prince Edward Island, Ontatio and Alberta are at the low end of the scale, keeping these provincial indexes below 65.
