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Toronto, July 27, 2017 - Canada's small business optimism failed to pick itself up in July, slipping 0.2 points to 60.7, according to the Canadian Federation of Independent Business (CFIB)’s Business Barometer®.
“Below par results in Ontario are continuing to weigh down cross-country confidence,” said Ted Mallett, CFIB Chief Economist. “We also saw small declines across western Canada which muted stronger results in Manitoba, Quebec and the Atlantic region. Overall the results are mediocre by historical standards, but in line with the sentiment we’ve seen over the last half of last year.”
British Columbia (65.9) and Alberta (57.3) both saw confidence fall by four points in July, while Saskatchewan (50.0)saw a two point dip. Ontario (59.5) recovered a point and a half after its 10 point plummet last month. Manitoba (68.9)’s confidence increased by nearly two points to reach a five-year high. Quebec (68.9) saw a three point gain, while Prince Edward Island (73.8) leapt six points to top spot in the country. Nova Scotia (66.9) confidence increased by three points, and New Brunswick (63.9) held steady. Optimism remains subdued in Newfoundland and Labrador (51.8), but a three and a half point increase in July means it’s no longer the lowest in the country.
The strongest industry results came from health and professional services, as well as manufacturing and whole sale sector businesses, each with index levels above the 65 mark. Financial and real estate services took a five point hit, likely as a result of cooling measures in the housing market. Their index remains solid at 64.4. Agriculture, natural resources and retail sectors saw the biggest falls, each sitting barely above the 50.0 mark.
“Concern over future operating constraints appears to be driving the lack of optimism nationally,” added Mallett. “Employment plans have dropped off considerably this month, to a point where the 14 per cent expecting to hire full time in the coming months sits barely above the 12 per cent who plan to trim the numbers. At the same time, wage costs are expected to rise well past historical norms.”
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.
July 2017 findings are based on 710 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through July 18. Findings are statistically accurate to +/- 3.7 per cent 19 times in 20.
To arrange an interview with Ted Mallett, please contact Kiara Morrissey at 416-222-8022, or [email protected].
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and