TORONTO—The Canadian Federation of Independent Business (CFIB) says optimism continues to decline among Canada’s small- and medium-size businesses.
The CFIB’s Business Barometer index fell to 60.0 in August from 60.9 in July, its fifth consecutive monthly decline and one the federation says suggests “very slow growth in the national economy.”
“(But) just to keep things in perspective, the index is still more than 20 points higher than the recessionary low of 39.9 in December of 2008,” said Ted Mallett, CFIB vice-president and chief economist.
Among the provinces, optimism increased only in Newfoundland and Labrador and Quebec and was little changed in Nova Scotia.
Elsewhere across the country, confidence dropped sharply in Prince Edward Island, New Brunswick, Manitoba and British Columbia, while smaller declines were observed in Ontario, Saskatchewan and Alberta, the federation said.
“Insufficient domestic demand and shortages of suitably skilled labour were the most commonly cited constraints on business performance, both at 37 per cent,” Mallett said.
Full-time hiring plans continue to be the bright spot in the survey results: 18 per cent of business owners plan to hire full-time staff in the next three or four months compared with 12 per cent who said they will cut back.
Overall, 41 per cent of business owners described their state of business to be in “good” shape, about three-times the 12 per cent who said their state of business is “bad.”
Measured on a scale of 0 and 100, an index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance.
According to past results, index levels normally range between 65 and 70 when the economy is growing at its potential.
The August 2012 findings are based on 903 responses, collected from a stratified random sample of CFIB members to a controlled-access web survey.