According to the latest monthly Business Barometer®, optimism among small business owners in Manitoba declined 3.7 points in August to an index of 65.2, compared to 68.9 in July. However, Manitoba’s index still sits well above the national index of 59.8, and 9.1 points above its August 2016 reading.
Short-term hiring plans also kept positive with 16 per cent of business owners looking to hire and 12 per cent looking to cut back. Similar to last month's reading, about 44 per cent of business owners say their businesses are in good shape, while only 7 per cent report that their firms are in poor shape.
Nationally, small business optimism dropped again in August, the third month in a row where sentiment has been lacklustre. CFIB's monthly Business Barometer Index landed at 59.8, about a point lower than July's weak 60.7 reading.
The drop in the index is really a tale of two economies. Business optimism continues to be robust in most of eastern Canada, while optimism in the largest economies west of Quebec is sagging.
For example, both Ontario (56.9) and British Columbia (63.3) dropped 2.6 points from their index levels last month, while Alberta (57.8) showed little change. Not surprisingly, business owners in these three provinces expect their wage costs to rise, likely due to provincial labour legislation plans.
Meanwhile, business optimism remains buoyant in the east, with owners in PEI and Quebec showing the highest index levels at 72.7 and 71.5respectively. Business owners in New Brunswick (67.6) and Nova Scotia (66.7) are also reasonably upbeat, along with Manitoba (65.2). Saskatchewan(52.9) and Newfoundland & Labrador (54.5) remain the most pessimistic, but movements in the August results are in a positive direction. Results and the full report are available at: Business Barometer.
Highlights of the Manitoba Business Barometer for August:
- 44% of small businesses in Manitoba say their overall state of business is good (42% nationally); 7% say it is bad (12% nationally).
- 16% of Manitoba small businesses plan to increase full-time employment in the next 3-4 months (16% nationally), and 12% plan to decrease employment (13% nationally).
- Insufficient domestic demand remains the main operating challenge (36%), followed by management skills/time constraints (31%), and shortage of skilled labour (27%).
- Major cost pressures for small business include: tax/regulatory costs (65%), wage costs (50%), and insurance costs (38%).
Measured on a scale of 0 and 100, an index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 70 when the economy is growing at its potential. August 2017 findings are based on 706 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through August 21. Findings are statistically accurate to +/- 3.7 per cent 19 times in 20.