Regina, August 31, 2017 - Today, the Canadian Federation of Independent Business (CFIB) released its latest monthly Business Barometer®, which reveals optimism among small business owners in Saskatchewan increased slightly to an index of 52.9 in August, from 50.0 in July, which is almost seven points below the national average index of 59.8.
“While optimism among Saskatchewan's small businesses gained back in August what it lost in July, its index of 52.9 is still the lowest in Canada,” said Marilyn Braun-Pollon, CFIB’s Vice-President, Prairie & Agri-business. “Hiring plans also remained weak in August with only eight per cent of business owners looking to hire (2nd lowest in Canada) and 13 per cent planning to cut back on full-time staff over the next three months.”
“We also fear the federal government’s tax proposals, along with fresh US demands for NAFTA changes, a potential federally-imposed carbon tax and several years of payroll tax increases will only create more uncertainty at a time when small businesses need reassurances from their governments,” added Braun-Pollon.
Nationally, small business optimism dropped again in August, the third month in a row where sentiment has been lacklustre. The index landed at 59.8, about a point lower than July's weak 60.7 reading.
“The drop in the index is really a tale of two economies,” said Ted Mallett, Chief Economist at CFIB. “Business optimism continues to be robust in most of eastern Canada, while optimism in the largest economies west of Quebec is sagging.”
For example, both Ontario (56.9) and British Columbia (63.3) dropped 2.6 points from their index levels last month, while Alberta (57.8) showed little change. Not surprisingly, business owners in these three provinces expect their wage costs to rise, likely due to provincial labour legislation plans.
Meanwhile, business optimism remains buoyant in the east, with owners in PEI and Quebec showing the highest index levels at 72.7 and 71.5 respectively. Business owners in New Brunswick (67.6) and Nova Scotia (66.7) are also reasonably upbeat, along with Manitoba (65.2). Saskatchewan (52.9) and Newfoundland & Labrador (54.5) remain the most pessimistic, but movements in the August results are in a positive direction. Results and the full report are available at: Business Barometer
Highlights of the Saskatchewan Business Barometer for August:
- 31% of businesses in Saskatchewan say their overall state of business is good (42% nationally); 12% say it is bad (12% nationally).
- 13% plan to decrease employment in the next 3-4 months (13% nationally) and 8% of Saskatchewan businesses plan to increase full-time employment (16% nationally).
- Insufficient domestic demand remains the main operating challenge (48%), followed by shortage of skilled labour (27%), and management skills, time constraints (23%)
- Major cost pressures for small business include: tax, regulatory costs (60%), insurance costs (46%) and wage costs (44%).
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. August 2017 findings are based on 706 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through August 21. Findings are statistically accurate to +/- 3.7 per cent 19 times in 20.
To arrange an interview with Marilyn Braun-Pollon, Vice-President Prairie & Agri-business on the provincial results please call (306) 757-0000, 1-888-234-2232 or email [email protected]. You may follow CFIB Saskatchewan on Twitter @cfibsk.
To arrange an interview with Ted Mallett, Vice-President & Chief Economist on the national results, please call (416) 222-8022 or email [email protected]. You may also follow Ted on Twitter @cfibeconomics.
Business Barometer® is a monthly publication of the CFIB and is a registered trademark.
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members (5,250 in Saskatchewan) across every sector and region.