TORONTO—Small business has hit a confidence high not felt since 2005, according to the most recent survey by the Canadian Federation of Independent Businesses.
Confidence among small and mid-sized companies climbed to 70.7 in April—a point and a half increase from the previous month.
Anything above 50 means business owners expect a stronger performance in the year ahead. Levels usually range between 65 and 75 when the economy is growing.
Businesses were most assured in Saskatchewan with 76.7, followed by Alberta at 75.1 and Manitoba with 74.3.
Ontario was also above average at 71.0—a five point increase.
“We were a little surprised by that figure,” says Ted Mallett, vice-president and chief economist at CFIB.
Factors such as the high dollar didn’t seem to bother companies, he says.
“It seems the benefits of purchasing inputs cancels out the impact from the rate on exports,” Mallett says, although he adds that this is not so much the case for businesses that depend more on the U.S. for trade.
The confidence boost is translating into more short-term hiring plans, with 18 per cent who intend to add full-time staff in the next few months.
Owners are also planning to increase wages by an average of 1.6 per cent.
But not everyone was feeling so hot.
Confidence was lower in Quebec at 65 points as well as in the Maritimes, suggesting a gap between producing and consuming provinces, Mallett says.
Companies were worried about costs, especially rising fuel and energy prices—a major concern for 74 per cent.
They cited constraints such as insufficient domestic demand, skilled labor and capital.