December 27, 2018 – Small businesses are ending the year on a bad note, with confidence nosediving 7.6 index points to a two-and-a-half year low of 53.6 in December, according to the Canadian Federation of Independent Business (CFIB)’s Business Barometer®.
“Small business owners are concerned about the low export prices of oil and what it could mean for business prospects and consumer spending down the line,” said Ted Mallett, CFIB’s vice president and chief economist. “These prices are volatile and the worst of the effects may be transitory, but the cascading impacts of the 2014-16 price crunch on the economy is still fresh in business owners' minds.”
An index level between 65 and 70 normally indicates that the economy is growing at its potential and a majority of owners expect their business’s performance to be stronger in the next year.
Provincial results: Confidence drops in most regions
Only three provinces saw confidence growth this month: Saskatchewan gained 2.2 points to 51.6, Nova Scotia gained 1.9 points to 57.0 and Quebec gained a modest 0.9 points to 61.8. Alberta experienced the greatest drop in optimism, losing a staggering 8.7 points and dropping to the lowest spot in the country at 45.1, followed by Newfoundland and Labrador at 48.4. Prince Edward Island lost 1.3 points, but remained the most optimistic province at 67.9, with New Brunswick (62.5) coming in second despite a sizeable drop of 4.7 index points. British Columbia (60.1), Manitoba (59.4) and Ontario (59.1) all lost confidence, but remained above the national average.
Industry results: Optimism still in decline
Confidence fell in 12 out of 13 sectors this month. After being the most optimistic sector in November, professional services plummeted 13.3 points to 56.4. Agriculture and hospitality were tied for least optimistic sector at 50.7, followed by retail, which dropped 5.1 points to 51.5. Health and education services (64.2) and personal services (63.2) were the most upbeat industries. Transportation was the only industry that reported an increase of optimism, gaining 0.8 points to 56.5.
Read the December Business Barometer®
December 2018 findings are based on 709 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through December 14. Findings are statistically accurate to +/- 3.7 per cent 19 times in 20.
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Milena Stanoeva, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 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.