Monthly Business Barometer®

February 2023 Results

Canada's small business long-term confidence has seen a timid gain of only half a point in February 2023, while the short-term optimism has inched upwards slightly.  

CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, gained barely half a point to 51.7. The short-term optimism index, based on a 3-month outlook, reached 48.9, 2 points higher than the January level. An index above 50 shows that there are more business owners feeling confident than feeling negatively about the next months. Both indexes are generally at their lowest levels recorded since 2009, outside of recessions. 

Most provinces far below normal long-term optimism, the short-term is not much better

The Western provinces have each gained in optimism over the long term, with Saskatchewan seeing the second best reading overall and leading in terms of most improved confidence level (+4.4). Ontario has remained stable, albeit at low levels (51.5). Similarly to January, Quebec and three of the four Atlantic provinces are trailing the rest of the country with levels between 47 and 45. PEI is the exception in the East, with the highest optimism level at 63.0 

Long-term optimism in health & education, finance & insurance, info & recreation the only bright spots of the sectoral outlook

The industry picture is fairly stable with minimal changes in confidence from the previous month. Over the long term, three sectors register levels in the low 60’s (health, finance and insurance, and recreation and information sectors). Three sectors report indexes below 50 such as manufacturing, agriculture, and retail. And the rest of industries are seeing levels of between 50 and 60, which still represent modest optimism.

General business indicators

Full-time staffing plans have seen a very weak increase in the share of business owners looking to hire (19%) for the short term. Supply chain indicators have improved modestly also, with only 12% of SMEs reporting product distribution constraints versus 20% in January.  

Borrowing costs and product input costs are the top cost constraints seeing current levels of concern at about twice the historical average value. Sales or production growth is limited by labour shortages and input product shortages, these factors having readings well above the historical levels. 

Price and wage plans

Average future price increasing plans saw a weak uptick to 3.7; while average wage increase plans rose to 3.3 from the previous month’s 3.0.  

Factors limiting sales or production growth - current levels and trend, February 2023

Major input cost constraints - current levels and trend, February 2023

Methodology

February findings are based on 531 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from February 2 to the 13. Findings are statistically accurate to +/- 4.3 per cent 19 times in 20. Every new month, the entire series of indicators is recalculated for the previous month to include all survey responses received in that previous month. Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger over the next three or 12 months outnumber those expecting weaker performance. An index level near 65 normally indicates that the economy is growing at its potential. 

The next Business Barometer will be released on March 30, 2023.

Andreea Bourgeois, Director of Economics
Simon Gaudreault, Vice-President, Research and Chief Economist