Business Barometer®: Small business confidence remains shaken amid rising costs, supply-chain disruptions and labour shortages | CFIB
Toronto, November 4, 2021 – Small businesses are not feeling confident as they enter the last stretch of 2021, says the Canadian Federation of Independent Business (CFIB). CFIB’s October Business Barometer® rose only slightly to 45.5 index points (+2.3) on the three-month outlook, and 60.5 (+2.7) on the 12-month outlook. This follows the biggest drop in short- and long-term confidence since the start of the pandemic in September.
“This is a challenging time for small business owners. Many of them are out of the proverbial frying pan of lockdowns and right into the fire, with rising costs, heavy debt loads, difficulties obtaining supplies and a widespread and persistent shortage of labour” said Simon Gaudreault, Vice-President of National Research at CFIB. “Now the federal government has also withdrawn support from many businesses that still need it but can’t meet the high new bars of entry, adding even more pressure in the context of already very challenging business conditions.”
The increasing cost of doing business (74 per cent), supply chain challenges (63 per cent), labour shortages (54 per cent) and inflation (53 per cent) are the top concerns for small business owners heading into the fall, according to a separate CFIB survey. Only 78 per cent of businesses are currently fully open, 45 per cent are fully staffed and 39 per cent are making normal sales, according to CFIB’s Small Business Recovery Dashboard.
Indicators of business health trend downward
Other CFIB Business Barometer® indicators in October, like the general state of business health, hiring plans and capacity utilization, took a downturn. Wage increase plans remained high but stable at 2.5 per cent, but price increase plans for the next 12 months climbed to an unprecedented 3.9 per cent. Some of this is likely due to current challenges with supply chains and labour shortages, as well as increases in the costs of doing business in general.
“The crisis part of the pandemic may be over, but its echoes continue to destabilize small business recovery and the economy,” added Andreea Bourgeois, Senior Research Analyst at CFIB. “There is still a long way to go for a full recovery. Governments should act accordingly as they adjust business supports and consider adding on new costs for employers and entrepreneurs.”
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Milena Stanoeva, CFIB
This news release presents findings based on the following recent CFIB surveys:
- October Business Barometer®: October findings are based on 841 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from October 4 to 18. Findings are statistically accurate to +/- 3.4 per cent 19 times in 20.
- Your Voice – October 2021: An online survey completed by 4,084 CFIB members between October 5 and 27, 2021. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of ±1.5 per cent, 19 times out of 20.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 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.