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Oil-producing provinces weighing down small business confidence

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Toronto, February 25, 2016 – Small business confidence remained virtually unchanged in February, posting a 0.3 point gain to 54.7, remaining ten points below the level associated with normal economic growth.

“Weak small business confidence in Canada’s oil-producing provinces, and particularly Alberta, continues to weigh down the rest of the country,” said Ted Mallett, Canadian Federation of Independent Business (CFIB) chief economist. “We’re also seeing the impact of a struggling economy on pricing expectations which are on pace to go up by 2.4 per cent.”

On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.

Optimism slipped another point in British Columbia to 61.1. Alberta has once again hit a record low, falling to 26.7, remaining by far the weakest in the country. Saskatchewan is feeling the impact of the weak resources sector, dropping more than six points in February to 52.4. Manitoba held steady at 61.5. Ontario rebounded, jumping two points to 60.8, while Quebec climbed to 66.3, good for second in the country and one of its best readings since 2013. Newfoundland and Labrador saw a confidence free fall, losing 10 points to land at 53.5. Nova Scotia fell two points for the second month in a row, but its 66.9 mark is still the strongest in Canada. New Brunswick’s confidence slipped to 61.0. Prince Edward Island leapt five points to 65.5.

The natural resources, construction and agricultural sectors remain the weakest, while information and arts, professional services and hospitality sectors are strongest.

“We are seeing some hopeful signs in hiring with expectations trending upward this month,” added Mallett. “However, the dollar’s instability is continuing to create problems for import-reliant industries like wholesale and retail.”

February, 2016 findings are based on 723 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through February 15. Findings are considered accurate to +\- 3.6 per cent 19 times in 20.

To arrange an interview with Ted Mallett please contact Ryan Mallough at 416-222-8022 or [email protected].

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.