According to the latest monthly Business Barometer®, optimism among small business owners in Saskatchewan dropped to an index of 50.9 in September from 52.9 in August, which is six points below the national average index of 56.9.
Saskatchewan's small businesses were less optimistic in September than August, and the index still remains the lowest in Canada. Short-term employment plans also remained weak with only 10 per cent of business owners looking to hire and 13 per cent planning to cut back on full-time staffing over the next three months.
Concerns about taxes and regulations hit a record high in September with 62 per cent of Saskatchewan entrepreneurs citing these as their top cost pressures (compared to 49 per cent in September 2016). There is little doubt that some of the major contributing factors are related to the concerns about the federal government’s proposed tax changes, the NAFTA renegotiation, a potential federally-imposed carbon tax, and continued fallout from recent PST hikes. This is on top of EI, CPP and minimum wage increases that are already slated for the near future.
Nationally, small business optimism dropped for the fourth month in a row to an index of 56.9 (out of 100) in September, the lowest mark in 18 months.
Since reaching a year-high peak in May, the index has plummeted by nine points. What is most striking this month, however, is that the decline is widespread: optimism dropped in all 10 provinces and in 11 of 13 industry sectors.
Business owners in Quebec remain the most optimistic, with a relatively healthy index of 70.9. Owners in the Maritimes are also more optimistic than the national average, but indexes now in the low 60s are a considerable step back from August levels. The mood is notably more subdued in the rest of the country, with Saskatchewan and Newfoundland & Labrador indexes at 50.9 and 52 respectively and Ontario not that much better at 55. Manitoba and Alberta index levels are under the 58 mark, while BC’s dropped below 60 for the first time since 2012. Results and the full report are available at: Business Barometer
Highlights of the Saskatchewan Business Barometer for September:
- 34% of businesses in Saskatchewan say their overall state of business is good (40% nationally); 15% say it is bad (12% nationally).
- 13% plan to decrease employment in the next 3-4 months (15% nationally) and only 10% of Saskatchewan businesses plan to increase full-time employment (15% nationally).
- Insufficient domestic demand remains the main operating challenge (47%), followed by shortage of skilled labour (28%), and management skills, time constraints (22%)
- Major cost pressures for small business include: tax, regulatory costs (62%), insurance costs (47%) and wage costs (45%).
Measured on a scale of 0 and 100, an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 70 when the economy is growing at its potential. September 2017 findings are based on 810 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through September 18. Findings are statistically accurate to +/- 3.4 per cent 19 times in 20.