Regina, May 31, 2018 - Today, the Canadian Federation of Independent Business (CFIB) released its latest monthly Business Barometer®, which reveals optimism among small business owners in Saskatchewan dropped again in May to an index of 49.0, down from 54.6 in April and remains well below the national average index of 62.5.
“It is concerning to see that after a big drop of confidence in April, Saskatchewan small business optimism dropped again in May, with an index now the lowest among all provinces,” said Marilyn Braun-Pollon, CFIB’s Vice-President, Prairie & Agri-business. “In fact, the index is 16 points below the range of index levels (65-70) normally associated when the economy is growing at its potential.”
“Employment plans also remain weak with 15 per cent of Saskatchewan business owners looking to hire and 20 per cent planning to reduce staff,” stated Braun-Pollon. “The general state of business also deteriorated with only 29 per cent of entrepreneurs saying their businesses are in good shape, versus 19 per cent who see their firms in bad shape,” added Braun-Pollon.
Nationally, small business confidence is up this month after four consecutive months of lagging results at the beginning of the year. The index has risen to 62.5 in May, nearly six points over April’s results.
“The current confidence level isn’t back up to the last peak we observed in May 2017, but there is a noticeable improvement, especially in Ontario and PEI. The improved outlook could be a reflection of better weather in May over April, but we are always happy to see confidence go up, because it’s a sign of better business and economic conditions,” said Ted Mallett, CFIB’s Chief Economist. “However, sentiment in Saskatchewan, Newfoundland & Labrador and Alberta, which were hit hard by the resource price crunch of 2015-2016, continues to lag.”
Provincial results: PEI and Ontario biggest confidence winners
Small business owners in PEI and Quebec reported the highest rates of optimism at 70.5 and 68.1, with PEI gaining five index points over last month. Ontario saw the biggest spike in confidence, up eight points to 64.7. The outlook in Saskatchewan, Newfoundland & Labrador and Alberta remains weak, with all three provinces continuing to experience drops in confidence this month.
Highlights of the Saskatchewan Business Barometer for May:
- 29% of businesses in Saskatchewan say their overall state of business is good (40% nationally); 19% say it is bad (9% nationally).
- 20% plan to decrease employment in the next 3-4 months (11% nationally) and only 15% of Saskatchewan businesses plan to increase full-time employment (20% nationally).
- Insufficient domestic demand remains the main operating challenge (48%), followed by shortage of skilled labour (27%), and management skills, time constraints (25%).
- Major cost pressures for small business include: tax, regulatory costs (69%), insurance costs (52%) and wage costs (48%).
Read the May Business Barometer
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. May 2018 findings are based on 618 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through May 18. 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, CFIB’s Chief Economist on the national results, please call (647) 464-2814 or email [email protected].
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 110,000 members (5,250 in Saskatchewan) across every sector and region.