September 2018 SME business outlook survey results
The key measure of small business confidence in Canada held steady in September. CFIB’s Business Barometer® index registered 61.4 this month, almost identical to the 61.6 posted in August. This level of optimism is pretty typical of what we have seen during the past four years—a period of higher than usual economic and policy uncertainty. Comparisons with pre-2014 index levels show there is still considerable room for improvement.
The index was pretty stable in most provinces as well. Gains in Ontario and Quebec were offset by declines in Nova Scotia and, to some degree, Manitoba. Business owners in Quebec and Prince Edward Island are still by far the most upbeat in the country, with index levels approaching a hot 75. Results in Nova Scotia, Ontario and Manitoba remain close to the national average, while index levels in Newfoundland & Labrador, New Brunswick, Saskatchewan, Alberta and British Columbia remain mired a step or two behind in the mid- to high 50s.
Changes to the sector picture are also fairly balanced, with improvements seen in six sectors, deterioration in six and virtual no change in one. Agriculture, resources and financial services saw the biggest improvement, while retail, information and hospitality saw the biggest declines.
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.
Hiring plans remain a little weaker than we normally see this time of year, with 18 per cent of owners expecting to add full-time staff, compared to 14 per cent expecting to cut back. Forty-five per cent of owners say their businesses are in good shape, versus 10 per cent who report being in bad shape—a healthy margin and unchanged from August. In addition, new orders and the state of accounts receivable also look pretty positive.
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