Toronto, March 31, 2022 - Small businesses saw upticks in optimism and were feeling more confident in March, according to the latest Canadian Federation of Independent Business (CFIB) Business Barometer®. The 3-month index improved by 6 points to 60.2, the highest level since before the pandemic. The 12-month optimism index rose by 2 points to 65.1.
“Small businesses are starting to feel more optimistic as many restrictions are lifted across the country, signalling a new phase of this pandemic. However, other indicators of business health show that there are many concerns on the horizon, namely higher costs, supply chain challenges and labour shortages, which may hold back business recovery,” said Simon Gaudreault, Vice President of National Research at CFIB.
Three in ten businesses (34%) reported being in good shape, while 22% indicated being in poor shape. Price and wage plans continued their upward trend, with businesses predicting they would increase prices by an average of 4.7% over the next year, while wage plans have increased to 3.1%.
Businesses still facing cost pressures
Despite the uptick in optimism, businesses are still facing major cost pressures that may slow their recovery, growth and return to pre-pandemic sales levels. Fuel and energy costs were among the major cost constraints for a majority of businesses (72%), a 7% jump in one month. The shares of businesses with wage, insurance and product input costs are also on a upward trend.
Supply chain issues and labour shortages also continued to cause challenges for businesses in March.
“It’s good to see small business owners express optimism for the future after the last two years of the pandemic,” said Andreea Bourgeois, Director of Economics at CFIB. “However, that does not mean they are in a good position to absorb new costs. With the federal carbon tax set to increase April 1 and governments already planning to add various other new costs, businesses are still facing obstacles that hinder their success.”
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Dariya Baiguzhiyeva, CFIB
March Business Barometer®: March findings are based on 756 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from March 3 to the 14. Findings are statistically accurate to +/- 3.6 per cent 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.