1 in 5 businesses planning layoffs
According to the latest monthly Business Barometer®, optimism among small business owners in Saskatchewan declined again for a second-consecutive month falling to 55.1 in April. This is almost 10 points below the national average index of 64.4 and now also trails Alberta’s index of 57.9.
It is concerning to see employment plans are in negative territory with 21 per cent of business owners looking to decrease employment – this hits a record high for layoffs in the province. Clearly, entrepreneurs are feeling the impact of the $908 million in tax increases announced in the 2017 Saskatchewan Budget. In fact, the top cost pressures for Saskatchewan small business owners are tax and regulatory costs, cited by 55 per cent of respondents, which is up from 47 per cent in March. Unfortunately, it appears these massive tax increases have not only increased the overall cost of doing business, but also further eroded Saskatchewan’s small business confidence.
Canadian small business optimism is on the rise again in April. The national index gained a point and a half to finish the month at 64.4—its best level since November 2014.
The Index is less than a point shy of its 2010-14 average. This suggests that while lingering effects of the oil price shock persist in some regions, business expectations are readjusting to a new set of economic drivers.
April's national gains were supported mostly by strong optimism growth in Ontario (68.7), British Columbia (67.1) and continuing improvements in business sentiment in Alberta (57.9). Relative weakness, however, persists in Newfoundland & Labrador (43.8) and Saskatchewan (55.1), which have both seen little improvement in optimism levels for a number of months. There is broad uniformity, though, in the remaining provinces, where index levels cluster around the mid-60s, suggesting general robustness to the business outlook. Results and the full report are available at: Business barometer
Highlights of the Saskatchewan Business Barometer for April:
- 32% of businesses in Saskatchewan say their overall state of business is good (42% nationally); 13% say it is bad (12% nationally).
- 21% plan to decrease employment in the next 3-4 months (13% nationally) and 16% of Saskatchewan businesses plan to increase full-time employment (17% nationally).
- Insufficient domestic demand remains the main operating challenge (52%), followed by shortage of skilled labour (24%), and limited space (16%).
- Major cost pressures for small business include: tax, regulatory costs (55%), wage costs (45%) and insurance costs (36%).
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. April 2017 findings are based on 653 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through April 16. Findings are statistically accurate to +/- 3.8 per cent 19 times in 20.