August 2021 SME business outlook
Canada's small business confidence over the short and long-term changed little in August. The mix of lifting and re-introducing of restrictions caused heterogenous reactions among provinces and sectors.
CFIB's Business Barometer® Short-term Index, which is based on 3-month forward expectations for business performance, dropped to 55.9. The long-term optimism index which is based on 12-month outlook dropped two points to 67.1.
Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger in the next year outnumber those expecting weaker performance.
At 3.8% and 2.3% respectively, 12-month price and wage plans are getting even higher than in previous months. National employment plans remained similar as in July with 25 per cent of entrepreneurs planning on hiring while 13 per cent are forecasting layoffs.
Short-term optimism among the provinces covers the 50s range, with the exception of PEI which is at 40.0 and Quebec which is at 60.2 and still the most optimistic province.
Short-term sectoral confidence spans over a wider range from 51.1 in transportation to 65.1 in finance and insurance. Halting opening plans in some provinces made for a wide variety of changes among business sectors both in short term and in long term confidence.
The capacity utilization rate has increased marginally and reached 73.6. The most notable limitation on business growth is the shortage of skilled labour. Almost half of all respondents in August indicated so, which is by far the highest level this indicator has reached since 2009.