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Toronto, July 28, 2016 – After hitting a high water mark in June, optimism among Canada’s small business owners came back to earth in July, with the national Business Barometer® index dipping by more than two points to settle at 57.6.
“Though we see a bit of a dip nationally, we continue to see a slow and steady recovery in Alberta, where small business confidence took a big hit in the last year,” said Ted Mallett, Canadian Federation of Independent Business (CFIB) chief economist. “This is in line with our sectoral index, where we see natural resources businesses more optimistic than they have been since late 2014.”
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.
The downward turn was led by Saskatchewan (51.1), Nova Scotia (58.5) and British Columbia (66.4), with each dipping by three points. Manitoba (56.4) and New Brunswick (63.3) saw more moderate declines in optimism. Confidence levels in Ontario (61.2) and Prince Edward Island (68.8) were fairly steady, with the latter now topping the country. Newfoundland & Labrador (50.0) and Quebec (64.1) joined Alberta (46.7) in going upward against the national trend in July.
The most upbeat businesses are found in the finance, insurance and real estate (65.8), health and education services (65.8), and information, arts and recreation (63.0) sectors. Optimism in natural resource-based businesses remains weak relative to other sectors, but does show a marked improvement from lows seen in the past two years.
Short-term employment plans remain less-than-optimal, but businesses expecting to add full-time staff in the next few months continue to outnumber those expecting to cut back.
July 2016 findings are based on 642 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through July 19. Findings are considered accurate to +\- 3.9 per cent 19 times in 20.
Read the July Business Barometer®.
CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.