October 5, 2021 – Small business confidence fell steeply in September according to CFIB’s Business Barometer. Anxieties fueling the drop in confidence include labour shortages, supply chain challenges, and the impending end of federal support programs. The three-month outlook dropped more than 12 points to 43.2, while the 12-month outlook lost more than 9 points and is now at 57.8, the biggest decreases since the start of the pandemic in March.
“Small businesses are not back to pre-pandemic sales or staffing and are now facing a second tough winter with lower-than-normal cash reserves and higher than normal debt. It’s therefore not surprising confidence has plummeted, but it’s a worry when it comes to the broader economic picture in Canada,” said Simon Gaudreault, Vice President of National Research at CFIB.
Small and medium-sized enterprises (SMEs) play an essential role in the Canadian economy. They are responsible for over two-thirds of private sector employment and contribute more than half of Canada’s private sector gross domestic product (GDP).
“A healthy small business sector is critical to a healthy Canadian economy, and small businesses are still far from healthy. Governments need to be very focused on a soft landing out of this mess. That includes doing everything possible to avoid increasing business costs, and continuing pandemic support for the hardest-hit small firms,” added Laura Jones, Executive Vice-President at CFIB.
Wage and rent relief programs are currently set to expire in less than a month, despite only 40 per cent of businesses being back to normal sales levels.
Some provinces and industries hit harder
All provinces registered significant drops in optimism on both the long- and short-term indexes, with businesses in Quebec and Ontario seeing the biggest decreases. On the sectoral side, professional services (-15 points), hospitality (-11 points), and construction (-9 points) experienced the biggest short-term drops, while agriculture (-11 points) and retail (-10 points) saw the greatest long-term decreases.
|3-months outlook index||Monthly change||12-month outlook index||Monthly change|
|Newfoundland and Labrador||44.8||-5,2||66.0||-1.5|
|Prince Edward Island||34.8||-5.2||71.7||-0.8|
Read the September Business Barometer®
September findings are based on 894 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from September 7 to 20. Findings are statistically accurate to +/- 3.3 per cent 19 times in 20.
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Meriem Mezdour, CFIB
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.