Regina, October 27, 2016 - 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 in October to an index of 55.1, up 1.0 points from 54.1 in September, but still below the national average index of 57.7.
”Small business optimism in Saskatchewan gained a full point in October to reach 55.1. However, hiring plans and the state of business health have deteriorated.,” said Marilyn Braun-Pollon, CFIB’s Vice-President, Prairie & Agri-business. “Hiring plans remain weak with only 10 per cent of business owners looking to hire full-time, while 17 per cent are foreseeing layoffs. Only 31 per cent of entrepreneurs consider that their businesses are in good shape (compared to 45% in October 2015), while 17 per cent see their firms in poor shape. It’s evident the recent minimum wage hike, and the talk of introducing a costly carbon tax is putting a chill on business owners’ hiring plans.”
Nationally, small business optimism eased off slightly in October, following on the heels of a similar downshift a month earlier. The national index now stands at 57.7, down from 59.0 in September and 59.8 in August. The index, however, remains well above cyclical lows registered early in the year.
“While the overall results were relatively stable this month, there are a few underlying indicators to be keeping an eye on,” said Ted Mallet, CFIB’s chief-economist. “Employment is an area of concern: while employment plans tend to experience seasonal fluctuation, this October’s downward turn was sharper than we have seen in the past. Investment plans have also dropped to a post-recession low.”
Results across the provinces were mixed—rising in six and falling in four. Keeping with past patterns, the most optimistic businesses are in Prince Edward Island, Nova Scotia, Quebec and British Columbia, where index levels are all effectively equivalent at around the 65 mark. Ontario business owners followed with an index score of 60.4, while those in New Brunswick, Manitoba and Saskatchewan measured in closely between 55.1 and 56.1. Businesses in Alberta and Newfoundland & Labrador again showed the lowest levels of optimism with index levels at 41.5 and 44.4 respectively. Results and the full report are available here.
Highlights of the Saskatchewan Business Barometer for October:
- 31% of businesses in Saskatchewan say their overall state of business is good (38% nationally); 17% say it is bad (14% nationally).
- 10% of Saskatchewan businesses plan to increase full-time employment in the next 3-4 months (10% nationally) and 17% plan to decrease employment (21% nationally).
- Insufficient domestic demand remains the main operating challenge (43%), followed by shortage of skilled labour (37%), and management skills/time constraints (30%),
- Major cost pressures for small business include: wage costs (52%); tax, regulatory costs (49%); and insurance costs (42%).
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. October 2016 findings are based on 651 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through October 17. Findings are statistically accurate to +/- 3.8 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 firstname.lastname@example.org. 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@example.com. You may also follow Ted on Twitter @cfibeconomics.
Business Barometer® is a monthly publication of the CFIB and is a registered trademark.