Business owner confidence nose-dives

Confidence among Canada’s small- and medium-size businesses slumped in June, falling from 64.8 to 62.1, says the Canadian Federation of Independent Business (CFIB) index.

This drop wipes out the gains made over last year, when major concerns about Europe’s debt situation began to worry investors.

Measured on a scale of 0 and 100, an index level above 50 means most owners expect their businesses to perform well in the next year, and anything above 65 signals growth. And while the index climbed to 67.7 in March, it’s dropped consistently since.

Read: Macro concerns sap canadian business confidence

Business owners in Alberta (73.3) and Saskatchewan (72.5) have been the most confident over the last year, while optimism is lagging in Ontario (60.7), Quebec (59.7), Prince Edward Island (59.5) and Nova Scotia (56.4).

“Insufficient customer demand was the most commonly cited constraint on business performance, although concerns about customer demand have gradually trended downward in 2012,” says Ted Mallett, CFIB’s chief economist and vice president.

Meanwhile, concerns over shortages of working capital have increased slightly, he added, and a quarter of businesses are struggling to find credit.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.