July 30, 2020 – Small business outlook for the next 12 months is on the mend, but other measures of business health remain far below historic norms, according to the Canadian Federation of Independent Business (CFIB)’s Business Barometer®. The index of small business optimism reached 61.3 points in July.
“While it appears small business owners are feeling more confident about where they’ll be in a year, the unique nature of this economic shock is complicating the way we look at traditional indicators,” said Ted Mallett, CFIB’s chief economist. “It’s likely that many business owners have much lower expectations of what good performance means 12 months out. Shorter-term outlooks are still very weak. Additionally, we might be seeing some survivor bias at play— a notable number of weaker businesses polled in the spring are no longer responding to the survey, suggesting many may have failed in June and July.”
In total, 37 per cent of business owners said their business was in bad shape while 22 per cent said it was in good shape, a small improvement over June’s numbers. Hiring plans remained stagnant, with 14 per cent of business owners expecting to add full-time staff in the next three months and 30 per cent planning to cut back. Businesses’ shorter range 3-month outlooks are still on the same level as the 2008-09 recession.
Provincial results: Ontario and Nova Scotia businesses most upbeat
Ontario posted the highest optimism level at 66.0, followed by Nova Scotia (62.4), Saskatchewan (58.3) and Alberta (58.1). Quebec (39.6), Prince Edward Island (41.7) and New Brunswick (50.5) posted the lowest results. British Columbia (55.0), Manitoba (55.5) and Newfoundland and Labrador (56.1) were middle of the pack this month.
Industry results: Natural resources agriculture and arts and recreation post lowest results
The natural resources (40.9), agriculture (42.8), and arts and recreation (47.1) sectors were the least optimistic this month. Professional services (62.9), wholesale (62.6) and retail (62.0) came in at the higher end of the optimism scale.
An index level nearer to 65 indicates that the economy is growing at its potential.
Read the July Business Barometer®
July 2020 findings are based on 677 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from July 2 to 20. Findings are statistically accurate to +/- 3.8 per cent 19 times in 20.
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Wissal El Alaoui, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry 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.