Optimism among Canada’s small-and medium-size businesses declined for the fifth consecutive month, from 60.9 in July to 60.0 in August, finds the Canadian Federation of Independent Business (CFIB). This suggests very slow economic growth.
“To keep things in perspective, the index is still more than 20 points higher than the recessionary low of 39.9 in December 2008,” says Ted Mallett, CFIB’s chief economist and vice president.
Measured on a scale of 0 and 100, anything above 50 means most owners expect their businesses’ performance to be stronger in the next year. According to past results, index levels normally range between 65 and 70 when the economy is growing.
Optimism increased only in Newfoundland and Labrador (68.3), and Quebec (61.6). Confidence dropped sharply in Prince Edward Island (46.3), New Brunswick (60.5), Manitoba (58.1) and British Columbia (56.4), while smaller declines were observed in Ontario (58.4), Saskatchewan (69.5) and Alberta (67.9). Nova Scotia (54.4) saw little change from July.
Additional findings include:
- 18% of owners plan to hire full-time staff in the next three to four months;
- 12% say they will cut back on employees;
- 41% say their business is in “good” shape;
- 12% say their business is in “bad” shape;
- Insufficient domestic demand and shortages of skilled labour were the most commonly cited constraints on business performance, both 37%.