Small businesses more optimistic in April: CFIB
Only 5% foresee adding on full-time staff in the next three months, 63% say they will have to cut back
TORONTO — Despite the uncertainties that abound as a result of the COVID-19 pandemic, small business confidence edged up at the start of April after plummeting in March.
The Canadian Federation of Independent Business (CFIB)’s Business Barometer shows a seven point gain to 37.7 index points.
“The small bounce back in business confidence we’ve seen since the beginning of the month is a sign that the raft of unprecedented government intervention has had some effect, but we’re nowhere near a return to business as usual,” said Ted Mallett, CFIB’s vice-president and chief economist. “In fact, even more business owners are planning to lay off staff in the next three months than when we surveyed them two weeks ago.”
Only 5% foresee adding on full-time staff in the next three months, while 63% say they will have to cut back. Less than one-tenth of business owners say their business is in a good state, compared to 58% who say it is in a bad state. Wage and price plans and capital spending have all seen dramatic drops as well.
An index level nearer to 65 indicates that the economy is growing at its potential.
Manufacturing was among the lowest optimism levels at 32.6. Capacity utilization is an average 41.4%. The transportation sector was the most optimistic at 56.6.
Quebec remained the least optimistic province, though it gained 8.7 index points to 24.4. Newfoundland and Labrador (36.1), Alberta (36.8) and BC (37.8) all posted results close to the national average. New Brunswick (47.3) and Manitoba (46.2) were the most optimistic provinces. Ontario (41), Saskatchewan (42.6), Prince Edward Island (45.5) and Nova Scotia (45.9) all posted middle-of-the-pack results in the low- to mid-40s.
Early April 2020 findings are based on 1,602 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received on April 1 and 2. Findings are statistically accurate to +/- 2.4% 19 times in 20.