Monthly Business Barometer®

May 2025 Results

Key takeaways

• Small business optimism recovered some more in May but it is still far below the breakeven point of 50; 
• Negative employment plans for full- and part-time; 
• Average price increase planned for the next 12 months drops below 3%.

Small business optimism in Canada

CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, registered another slight gain reaching 40.0—about five points above April level. The short-term optimism index, based on a 3-month outlook, tiptoed upwards by a mere two points to 42.4. While confidence is trending in the right direction for the second consecutive month, it hasn’t even reached the breakeven point of 50 on long or short-term.

Optimism among all SMEs is extremely low, albeit firms trading internationally register lower levels than firms doing business only in Canada.

Provincial picture

Confidence in all jurisdictions ranges from low 30s to mid 40s – showing weak-to-none economic growth. Quebec and Alberta are the closest to reaching 50 – the level where equal shares of entrepreneurs expect stronger or weaker performances.

Sectoral overview

Sectoral long-term confidence spans a wider range – from mid 20s to high 40s. Health and education, followed by professional services are the least pessimistic industries followed closely by manufacturing and hospitality. Manufacturing registered the largest monthly jump in confidence, followed by hospitality.

Inflation indicators

The average price increase indicator dropped to 2.9. The average wage increase planned for the next 12 months remained largely unchanged since December 2024, sitting currently at 2.1. For more information about detailed price and wage increase plans, click here. 

Other indicators

Currently, 14% of firms are planning to hire and 16% are considering layoffs for the next 12 months. These numbers show a very low-key employment market despite the seasonal bump brought in by the summer months. The same negative employment trends are observed for part-time employment.

Insufficient demand remains the primary barrier to business and production growth – 59% of SMEs are reporting it as main limitation. Some key cost constraints have lessened this month (fuel costs, wage costs), while others have maintained their elevated pressure (taxes and insurance in particular).

Methodology

These results are based on 719 responses received from May 6 to 12 from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 3.7 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 below 50 means owners expecting their business’s performance to be weaker over the next three or 12 months outnumber those expecting stronger performance.  

The next Business Barometer will be released on June 19, 2025.  

Here are the planned release dates for the remainder of 2025: June 19, July 17, August 21, September 18, October 16, November 20, December 18. 

For regional information about business optimism, price plans, limitations and main cost constraints for SMEs, please visit: the Business Barometer, 2024 Retrospective. 

Andreea Bourgeois, Director of Economics

Simon Gaudreault, Vice-President, Research and Chief Economist

Laure-Anna Bomal, Economist