Regina, November 24, 2016 - Today, the Canadian Federation of Independent Business (CFIB) released its latest monthly Business Barometer®, which reveals optimism among small business owners in Saskatchewan tumbled in November to an index of 51.3, down 3.8 points from 55.1 in October, remaining below the national average index of 59.4.
“Small business optimism in Saskatchewan took a downward path in November with its index reaching 51.3 after losing more than three points. The Barometer is now almost 14 points below the range of index levels (65-70) normally associated when the economy is growing at its potential,” said Marilyn Braun-Pollon, CFIB’s Vice-President, Prairie & Agri-business. “Hiring plans also remain weak with only 9 per cent of business owners looking to hire full-time, while 16 per cent are planning layoffs. Similar to October's levels, only about one-third of businesses are saying that their firms are in good shape (compared to 43% in November 2015), while 16 per cent see their firms in poor shape.”
“Given the number of challenges Saskatchewan business owners are facing, the worst thing the provincial government could do is hike taxes or introduce new taxes to fund their revenue shortfall,” added Braun-Pollon. “A forecasted deficit of $806 million highlights the need for significant spending restraint, such as further reducing the size/cost of government through workforce attrition and narrowing the wages/benefits disparity (20.4%) between public and private sector employees.”
Nationally, while there was a slight uptick in small business optimism in November, confidence has been rather consistent since early spring. The Barometer index now stands at 59.4, up less than two points over October's 57.7, and essentially equal to April’s 59.2.
“We’re seeing a general stability in the numbers at the moment,” said Ted Mallett, CFIB chief-economist. “There are some indicators in the energy producing provinces that are a cause for concern, such as Alberta’s low number of owners looking to hire, but there is slight momentum in places like BC.”
Movements in the index across the provinces were balanced, rising in five and falling in five—including those with the least optimistic business owners: Alberta (37.3), Newfoundland & Labrador (42.3) and Saskatchewan (51.3). Leading optimists again were owners in Prince Edward Island (71.4) and British Columbia (69.0), both with improving sentiment over October readings. Optimism in the rest of the country showed more consistency with index levels ranging in a narrow five-point range: Nova Scotia (64.9), Quebec (63.8), Manitoba (63.2), Ontario (62.2) and New Brunswick (59.4).Results and the full report are available here.
Highlights of the Saskatchewan Business Barometer for November:
- 34% of businesses in Saskatchewan say their overall state of business is good (38% nationally); 16% say it is bad (13% nationally).
- 9% of Saskatchewan businesses plan to increase full-time employment in the next 3-4 months (15% nationally) and 16% plan to decrease employment (20% nationally).
- Insufficient domestic demand remains the main operating challenge (45%), followed by shortage of skilled labour (30%), and management skills/time constraints (28%).
- Major cost pressures for small business include: tax, regulatory costs (53%); wage costs (42%); and insurance costs (39%).
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. November 2016 findings are based on 623 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through November 12. Findings are statistically accurate to +/- 3.9 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.