CFIB Business Barometer index dropped to 60.9, lowest reading since July 2009
Toronto—Optimism among Canada’s small- and medium-size businesses continued to decline in July, according to a Canadian Federation of Independent Business (CFIB) report.
The Business Barometer index dropped from 62.1 in June to 60.9, its lowest reading since July 2009, according to the CFIB.
“The major difference between now and two years ago was that the index was trending in the opposite direction, towards greater confidence,” CFIB chief economist and vice-president Ted Mallett said in a statement. “The index’s current position against GDP puts it very close to the zero-growth mark, suggesting Canada’s economy is nearing a standstill.”
Business owners in Saskatchewan (72.0) and Alberta (70.3) are the most optimistic, according to the CFIB, although only Newfoundland and Labrador (63.3) experienced an increase from June as index levels fell in every other province.
New Brunswick (64.8) and Manitoba (64.5) sit above the national average, while the three biggest provinces—British Columbia (60.5), Ontario (60.1) and Quebec (58.1)—are slightly below.
Index levels in Nova Scotia (54.0) and Prince Edward Island (52.7) are the country’s lowest, according to the report.
“Retailer optimism took a big tumble in July and has joined the hospitality and personal services sectors in the sub-60 club, suggesting that consumers are getting cautious with their spending,” Mallett said.
The report found good news in a rebound of hiring expectations.
According to the CFIB, 20 per cent of business owners plan to hire full-time staff in the next three or four months (up from 15 per cent in June), compared to 12.8 per cent who say they will cut back (up from 12 per cent).
Overall, 42 per cent of business owners described their state of business to be in “good” shape, nearly three-times the 13 per cent who said their state of business is “bad.”