Toronto, October 26, 2023 - The 12-month small business confidence index, which has been on a downward trend in recent months, saw a further drop of 1.5 points down to 47.2 in October. This is the lowest reading for this indicator since the onset of the pandemic in April 2020 and the third lowest monthly reading in close to 15 years.
Across the country, almost all provinces posted drops in confidence, with Quebec (46.1) and Ontario (46.5) registering the lowest long-term outlooks.
“While our Main Street Quarterly forecasts indicated last week that the economy will narrowly avoid a recession in the second half of this year, many signs still point to a lot of trouble for small businesses. We’re hearing from many businesses that they’re at full capacity and busy, but they’re not making a profit either. Inflation, financial pressures, labour challenges, uncertainty: name a business challenge and it’s happening in Canada right now,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
On the bright side, businesses’ average price and wage plans have shown improvement throughout 2023 and are sitting at 3.0% and 2.9% in October, respectively. Yesterday’s announcement by the Bank of Canada not to further hike interest rates will also certainly be welcome news for many entrepreneurs struggling with their finances or hoping consumers regain confidence soon.
On the other hand, October survey results show historically elevated shares of business owners remain worried about occupancy (29%), borrowing (44%), insurance (56%) and wage (66%) costs.
The share of businesses reporting a shortage of skilled labour also increased slightly in October to 49% and is still higher than its historical average of 35%. Last week, CFIB’s Main Street Quarterly reported that vacancy rates have gone down in Canada in Q3, but that there were still close to 600,000 unfilled private-sector jobs, or almost 50% more than before the pandemic.
The share of small businesses reporting insufficient domestic demand has been on an upward trend since last spring and reached 43% in October, up from 39% in September. Tellingly and despite the holiday shopping season around the corner, businesses in retail (40.7) continue to be at the bottom of the optimism scale.
“While the softening of the labour market as well as wage and price plans bring good news on the inflation front for businesses struggling to keep up with high costs, our different business indicators show their outlook remains quite difficult,” said Andreea Bourgeois, Director of Economics at CFIB. “And small businesses are very much wondering about what the next few months have in store, especially with the ongoing geopolitical situation and the looming Canada Emergency Business Account (CEBA) repayment deadline being less than three months away.”
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
Methodology
October Business Barometer®: September findings are based on 596 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from October 3 to 11. Findings are statistically accurate to +/- 4.0 per cent, 19 times in 20. Every new month, the entire series of indicators is recalculated for the previous month to include all survey responses received in that previous month. Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger over the next three or 12 months outnumber those expecting weaker performance. An index level near 65 normally indicates that the economy is growing at its potential.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
Print Article
Share Article
