Business Barometer®: Small business confidence takes major dive in July

July 26, 2018 – Small business confidence took a nose dive in July, following an upturn in May and June. The Canadian Federation of Independent Business (CFIB)’s Business Barometer® index dropped five and a half points to 56.8.

“This is the second-weakest confidence level we’ve observed since the resource price crunch of 2015 and 2016,” said Ted Mallett, CFIB’s vice president and chief economist. “It’s likely that small business owners are losing confidence as a response to international trade tensions, such as the US tariffs on steel and aluminum and Canada’s retaliatory tariffs on US products.” 

Industry results: Significant confidence drops in a majority of sectors

Agriculture and retail experienced significant confidence drops to 40.3 and 54.2 respectively, likely due to trade concerns. The wholesale trade, transportation and information sectors also saw noticeable declines. However, manufacturing and many parts of the service sector remained optimistic.

An index level between 65 and 70 normally indicates that the economy is growing at its potential and a majority of owners expect their business’s performance to be stronger in the next year.

Provincial results: Ontario experiences sharp loss of confidence

Ontario lost 6.1 points this month, the biggest confidence drop in all the provinces. New Brunswick and BC also experienced confidence drops to 55.3 and 56.1 respectively. Quebec lost 3.3 index points this month, but remained the second most optimistic province after PEI. Newfoundland & Labrador and Saskatchewan experienced confidence gains but remained below the national average. Nova Scotia experienced a healthy 2.5 point gain to 65. Confidence in Alberta and Manitoba remained largely unchanged at 55.8 and 60.1 respectively.

Small business owner outlook

This month, 44 per cent of owners reported that their business is in good shape, compared to 13 per cent who say they are in bad shape. Full time employment plans are also muted, with 17 per cent of owners expecting to add staff compared to 12 per cent who plan to cut back in the next three or four months.

Read the July Business Barometer®

July 2018 findings are based on 736 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through July 16. Findings are statistically accurate to +/- 3.6 per cent 19 times in 20.

For media enquiries or interviews, please contact:
Milena Stanoeva, CFIB

About 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 sector and region. Learn more at