Toronto, April 28, 2022 – The short-term confidence has been improving in all business sectors, including those that have been significantly affected by the pandemic, according to the latest Canadian Federation of Independent Business (CFIB) Business Barometer®. Businesses in the hospitality sector saw the highest jump in short-term optimism, up by 16 points. However, labour shortages and rising costs continue holding businesses back from recovery.
The three-month optimism index sits at 60.8, an increase of 0.7 points from March. The 12-month index dropped by 0.4 points, to 64.9.
“With the approaching seasonal peak activity and loosening of travel restrictions, small businesses in some sectors, especially hospitality, are feeling more confident. Almost all business health indicators have also seen improvement over last month’s results,” said Simon Gaudreault, Vice President of National Research at CFIB. “Despite the improvements in business sentiment, many small businesses are still facing significant challenges such as inflationary pressures, high fuel and energy costs, and shortages of labour.”
In total, 38% of businesses said they were in a good shape, while 17% reported being in poor shape, a small improvement over March’s numbers. Hiring intentions continue their gradual upward trend, with 28% of businesses planning to add full-time staff and 11% saying they will cut back.
Pricing and wage plans continued to climb, with businesses expecting to increase prices over the next 12 months by an unprecedented 4.9% on average, while wage increase plans have reached 3.3%.
Additionally, one half of small business owners report that skilled labour shortages continue to pose a challenge for their return to normal sales, a third say that unskilled labour shortages are holding them back and a third report supply chain disruptions.
Fuel and energy costs (73%), wage costs (59%), and insurance costs (54%) were also the top cost constraints for small businesses in April.
“As small businesses continue to deal with high levels of debt, and widespread shortage of products and labour, these challenges keep stalling small businesses’ recovery and their return to pre-pandemic levels of sales,” said Andreea Bourgeois, Director of Economics at CFIB.
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Dariya Baiguzhiyeva, CFIB
April Business Barometer®: April findings are based on 784 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from April 5 to 15. Findings are statistically accurate to +/- 3.5%, 19 times in 20. Every new month, the entire series of indicators is recalculated for the previous month to include all survey responses received in that previous month.
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.