Low confidence among manufacturers also contributing to bleak outlook
TORONTO—Canada’s small business confidence took it on the chin in July, according to the Canadian Federation of Independent Business. The organization’s Business Barometer Index slipped another full point over the past month to 58.2, its lowest level since mid-2009.
“Low confidence in the prairies and an underperforming central core has the economy beaten down,” Ted Mallett, CFIB’s chief economist and vice-president, said. “Confidence is now a point just below the marker that indicates zero real GDP growth and other indicators have turned sour. Employment plans are back below seasonal norms, and a weak dollar and the higher cost of imports have driven pricing plans up.”
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. Generally, an index of between 65 and 70 is normal when the economy is growing at its potential.
With low commodity and mineral prices, it’s the resource sector that continues to show the weakest levels of optimism in the country. Below-average confidence in manufacturing, construction, wholesale and retail is also contributing to the less than upbeat outlook, offsetting reasonably good assessments in the rest of the services sectors.
The CFIB notes only 17 per cent of businesses plan to hire additional full-time staff in the next few months, versus 12 per cent that plan to cut back.
Business owners in British Columbia saw their run as the most optimistic region of the country come to an end, eclipsed by businesses PEI, while Alberta remains the least optimistic province for business owners.