Business Barometer®: Some things go back to normal, but too many small businesses end the year without meaningful recovery or much optimism

Toronto, December 29, 2022 – Small businesses are wrapping up the year with a mixed outlook, according to the latest Canadian Federation of Independent Business (CFIB) Business Barometer®. Despite ongoing challenges, the state of business this December is virtually back to where it was three years ago: 38% of entrepreneurs now say their business is in good shape and 17% describe their situation as bad (those shares were 38% and 16% respectively in December 2019). 

“Although it is encouraging to see some things going back to normal, such as how entrepreneurs perceive the overall state of their business, we have to recall that recovery, especially on the financial side, remains elusive for too many”, said Simon Gaudreault, Chief Economist and Vice-President of Research at CFIB. “Our Small Business Recovery Dashboard shows 52% still have below normal sales and 58% carry outstanding pandemic debt, for an average of more than $114,000.” 

Other Business Barometer® indicators also reflect the current mixed picture. Capacity utilization has been hovering around almost 80%—a good level—in 2022, and supply chain indicators have shown continuous improvement throughout the year. Shortages of skilled or semi-/unskilled labour eased up recently, but they remain a big headache, currently affecting 49% and 36% of businesses, respectively. And various costs continue to cause difficulties for historically high shares of small businesses, including fuel and energy (73% of businesses this December), insurance (64%), wages (61%), product inputs (49%), borrowing (37%) and capital equipment and technology (27%). 

Perspectives for 2023 are far from rosy 

Meanwhile, the 12-month index, the main small business confidence indicator of the Business Barometer®, registered 50.9 index points this month, a modest 0.9 increase over last month. This is a level that remains quite low and is usually only visited around recession periods. Firms in retail, agriculture and construction were the least optimistic with levels below 50. The short-term outlook dropped more than three points to 40.2. 

“The readings this month remain very low by historical standards. Businesses have been through the wringer, so it’s not surprising they’re entering the new year with caution and anxiety,” Gaudreault added. “However, on the macro level, there may be some cause for optimism as we see some of the inflationary pressures continue their downward trend or at least somewhat settle in the last few months.” 

Average 12-month price plans saw a small uptick to 4.1% in December (they were at 4.0% in November), while wage increase plans have dropped to 2.9%. Both are still historically high but have come down from their mid-year peaks. 

“The post-holiday months are typically where businesses see a dip in activity so some of what we're seeing is seasonal and expected. However, the fundamental situation for small businesses is far from rosy as they’re under a huge cost pressure, feeling the pinch of inflation and the burden of pandemic debt,” Gaudreault concluded. “Very high costs of doing business and a slowing economy are likely to challenge many businesses’ budgets and survival in the upcoming months.” 

For media enquiries or interviews, please contact: 
Maud Larivière, CFIB 

December Business Barometer®: December findings are based on 620 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from December 1 to the 9. Findings are statistically accurate to +/- 3.9 per cent 19 times in 20. 

Small Business Recovery Dashboard: Based on Your Voice – November 2022, an online survey completed by 3,264 CFIB members between November 10-28, 2022. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of ±1.7 per cent, 19 times out of 20. 

About CFIB 
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 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