November 2018 SME business outlook survey results
Small business confidence continued its path of flat and unspectacular performance in November. At 61.2, CFIB’s Business Barometer® index was 0.7 points higher than in October, but only really back in line with readings from August and September. The mood should be better. Relative to GDP growth, the Index has, since 2015, been underperforming by about 5 points.
Although we saw an improvement in business outlooks in New Brunswick (67.2) and British Columbia (63.1), sentiment cooled markedly in Nova Scotia (55.1) and Quebec (60.9). General business optimism remains highest in Prince Edward Island (69.2), but lowest in Saskatchewan (49.4), Newfoundland & Labrador (51.8) and Alberta (53.8). Sentiment in Ontario (62.1) and Manitoba (61.3) are close to the national average.
Optimism in the retail sector reversed its gain from October and the resources sector also weakened somewhat. Industries with the most upbeat outlooks include professional services, health care—and to some extent manufacturing and wholesale trade. Business owners in the rest, however, are measurably less optimistic about their prospects for the next 12 months.
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.
Businesses expect to increase prices by about 2.2 per cent over the next 12 months, while wages are expected to rise by about 2 per cent. Employment plans appear to have returned to seasonally normal levels, with 18 per cent of owners hoping to hire additional full-timers versus 14 per cent expecting to cut back. Overall, about 42 per cent of business owners say their firms are in good shape while 11 per cent say they are in poor shape--pretty much the average for the year to date.
Ted Mallett, vice-president & chief economist, 416 222-8022
Andreea Bourgeois, senior analyst, 506 855-2526
Simon Gaudreault, senior director, national research, 514 861-3234