Monthly Business Barometer®

January 2023 Results

Canada's small business long-term confidence has seen its second consecutive small uptick in January 2023, while the short-term optimism has soared a significant 7 points.

CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, increased by a mere half a point to 51.4. The short-term optimism index, based on a 3-month outlook, reached 47.1, 7 points higher than in December. An index above 50 shows that there are more business owners feeling confident than feeling negatively about the next months.

Provincial Outlook

The provincial outlook over the long term is mixed. Quebec and three of the four Atlantic provinces are all below 50, while BC is the only Western province under 50. The remaining five provinces are above 50 – PEI is the only Eastern province and leads the country in optimism (58.6); Ontario is close to the average (51.1) and the other three are displaying rather healthy levels (Alberta, Saskatchewan, and Manitoba).

Sectoral Outlook

The information and recreation sector starts the year on a very optimistic note leading with high confidence over both time horizons (60.6 over the long term and 56.0 over the short term). Businesses operating in health services and professional services are rounding up the top three most optimistic sectors over the long term (all have readings close to 60). At the opposite end, construction, agriculture, and retail are the least optimistic – all with levels below 50.

General business indicators

Full-time staffing plans are muted for the short term, with equal shares of entrepreneurs looking to hire and to lay off. About 51% of firms are planning on making short-term capital investments.

Price and wage plans

Average future price increasing plans decreased to 3.6; while average wage plans remained stable at 3.0. Both readings are still high by historical norms but are trending on an encouraging downward path.

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

 

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

 

Methodology

January findings are based on 651 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from January 9 to the 16. Findings are statistically accurate to +/- 3.8 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 February 23, 2023.

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

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