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Small business sentiment saw little change in June. CFIB’s Business Barometer® index shaved off a minor 0.3 points to 62.2 this month from its May level. Generally, though, optimism is still underperforming relative to 2010-14 norms, when the index averaged close to 65 points.
Business owners in PEI and Quebec once again lead the country in optimism, with robust index levels of 74.5 and 72.8 respectively—both gaining 4 or more points over May readings. Alberta also saw an improvement of about 3 points, but its index is still underperforming at 56.5. On the other hand, business owners’ outlooks turned downward in Saskatchewan (44.8), Ontario (62.4) and New Brunswick (59.0). June results in the rest of the country were little changed: Newfoundland & Labrador (50.0), Nova Scotia (62.5), Manitoba (59.3) and British Columbia (58.8).
The industry picture looks quite balanced, although agriculture and natural resources businesses remain less upbeat than the rest. All of the other 11 sector groupings have index levels within a very narrow range between about 60 and 66.
On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.
The other metrics on business performance and expectations are looking more positive. The percentage of owners who say their businesses are in good shape has surged to a record high of 47 per cent, versus only 10 per cent who say their businesses are in bad shape. Full-time employment plans are also improving on a net basis—with 19 per cent planning to add on versus only 9 per cent expecting to cut back on numbers. Metrics on new orders and accounts receivables also look good.
Ted Mallett, vice-president & chief economist, 416 222-8022
Andreea Bourgeois, senior analyst, 506 855-2526
Simon Gaudreault, director, economic affairs, Quebec, 514 861-3234