Regina, May 30, 2019 – Today, the Canadian Federation of Independent Business (CFIB) released its latest monthly Business Barometer®, which reveals optimism among small business owners in Saskatchewan fell again in May to an index of 49.1, down from 50.4 in April. The index is now 10 points below the national average index of 59.7.
“It’s concerning to see Saskatchewan’s small business confidence decreased again to 49.1 – which is almost 16 points below the range of index levels (65-70) normally associated when the economy is growing at its potential,” said Marilyn Braun-Pollon, CFIB’s Vice-President, Prairie & Agri-business. “Hiring plans have also remained weak with 25 per cent of business owners planning lay-offs in the next three months, which is a record high for lay-offs in the province compared to only 11 per cent who plan on hiring.”
“We know small businesses have been hit with many cost increases and much uncertainty,” added Braun-Pollon. “There is little doubt some of the major contributing factors are related to the costly federal carbon tax, ongoing Ag trade uncertainty with China, and not to mention the extremely dry conditions across most of Saskatchewan.”
“The Carbon Action Incentive Fund announced today by the federal government will do little to relieve small businesses of the financial burden imposed by the carbon tax,” stated Braun-Pollon. “This is simply too little, too late for small firms. Nothing short of a full rebate equal to the amount they will spend in carbon taxes would be satisfactory.”
Nationally, small business confidence reached its highest level of 2019 this month, jumping three index points to 59.7.
“For the first time since last November, small business confidence is narrowly above its four-year average,” said Ted Mallett, CFIB’s Vice-President and Chief Economist. “However, there is room for improvement and the reading is still trailing 2010-2014 norms by five or so points.”
Provincial results: Most provinces grow more optimistic; Saskatchewan least optimistic
Confidence improved in seven out of 10 provinces this month. Prince Edward Island led the pack with an index level of 66.3, followed by Quebec (64.7),Nova Scotia (64.4) and Ontario (61.7). Alberta experienced the greatest confidence gain, rising 7.7 index points to 51.8. Manitoba (52.3) and New Brunswick (54.7) experienced modest confidence gains, but remained below the national average. British Columbia saw the greatest decrease, dropping 2.4 points to 53.1.Saskatchewan dropped 1.3 points to 49.1, the lowest spot in the country, followed by Newfoundland & Labrador (49.4).
Highlights of the Saskatchewan Business Barometer for May:
- 30% of businesses in Saskatchewan say their overall state of business is good (43% nationally); 20% say it is bad (14% nationally);
- 11% plan to increase employment in the next 3 months (20% nationally) and 25% of Saskatchewan businesses plan to decrease full-time employment (12% nationally);
- Insufficient domestic demand is the main operating challenge (50%), followed by shortage of skilled labour (26%) and management skills, time constraints (20%);
- Major cost pressures for small business include: tax, regulatory costs (68%), fuel, energy costs (55%), insurance costs (51%), and wage costs (49%).
Read the May Business Barometer®
Measured on a scale of 0 and 100, an index level 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. May 2019 findings are based on 745 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through May 17. Findings are statistically accurate to +/- 3.6 per cent 19 times in 20.
To arrange an interview with Marilyn Braun-Pollon, Vice-President Prairie & Agri-business on the provincial results please call (306) 757-0000 or email [email protected]. You may follow CFIB Saskatchewan on Twitter @cfibsk.
To arrange an interview with Ted Mallett, Vice-President & Chief Economist on the national results please contact Milena Stanoeva at 647-464-2814 or [email protected]. You may also follow Ted on Twitter @cfibeconomics.
CFIB is Canada’s largest association of small and medium-sized businesses with 110,000 members (5,250 in Saskatchewan) across every sector 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.