Index showing signs of consistent, gradual improvement overall
Toronto, March 30, 2017 - Canada's small business optimism remained steady in March, holding on to the gains it had posted a month earlier, according to Business BarometerÒ, a monthly index put out by the Canadian Federation of Independent Business (CFIB). The index remains at 62.9 points—the same as in February and 2.7 points above January’s reading.
“Although its trend is on the upswing, confidence still has a way to go before reaching historical norms,” said Ted Mallett, Chief Economist at CFIB. “Ideally, we’d like to see a reading get up to between 65 and 70 points, levels we haven’t seen since 2014. Still, overall trends across most of the country indicate a consistent but gradual move in the right direction.”
The national index has been supported by steadily improving perspectives in Alberta (55.5) as well as modest gains to indexes in Ontario (65.6), British Columbia (64.9) and Nova Scotia (65.9). Small business optimism in Quebec, Manitoba and New Brunswick is in similar territory (65.7, 64.5 and 63.8 respectively) but saw slight declines from their February levels. After three consecutive monthly increases, Saskatchewan’s index dropped slightly to 56.3, while bigger declines were seen in Prince Edward Island (58.6) and Newfoundland and Labrador (42.2).
The industry picture shows broad consistency across sectors, with a couple of exceptions. A sudden drop in sentiment in the construction sector has been offset by a big gain in manufacturing and agriculture. Views from business owners in other sectors show little change from previous survey and the index levels, for the most part, are clustered near the overall industry average.
(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.)
Other business operations indicators are suggesting a gradually improving economic picture. Hiring plans are recovering to near-normal levels for this time of year, with 21 per cent of business owners expecting to hire full-time staff in the next few months, versus 11 per cent expecting to cut back.
“Hiring intentions are beginning to catch up to the improving prospects in the economy overall,” concluded Mallett, adding “Small upticks were also noted this month in pricing plans, wages, order books and capital investment, all of which indicate that small business owners feel their firms are in better shape going forward.”
Register now to attend today’s Live Business Barometer Briefing!
Join Ted Mallett for a fifteen-minute interactive web briefing followed by a Q&A session. Ted will highlight specific areas of the report and answer any questions you may have about the Business Barometer. Live Barometer Briefing - March 30, 2017 @ 9am EST
March 2017 findings are based on 730 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through March 20. Findings are statistically accurate to +/- 3.6 per cent 19 times in 20.
Read the March Business Barometer
To arrange an interview with Ted Mallett, please contact Kiara Morrissey at 416-222-8022, 647-464-2814 or [email protected].
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region.