Small business confidence wanes as COVID-19 cases rise
Still haven’t recovered from the first wave of COVID-19 lockdown measures, 37% reporting they're losing money every day
TORONTO — Half of small businesses across Canada report they have seen a further drop in sales as a result of fears of a second wave of COVID-19, finds the latest COVID-19 recovery survey by the Canadian Federation of Independent Business (CFIB).
In some regions that are under new restrictions, such as Winnipeg and Toronto, that number rises to as much as 70%, according to the October survey of 3,901 businesses.
“Small businesses still haven’t recovered from the first wave of COVID-19 lockdown measures. In fact, 37 % of all businesses across Canada report they are actually losing money every day they are open,” said CFIB president Dan Kelly. “The new round of restrictions in several regions are already proving to be devastating to them, especially as new supports from government remain in the development stage.”
A drop in business sentiment was reflected in the results of CFIB’s monthly Business Barometer, falling 5.9 index points to 53.3.
Manufacturing confidence is ahead of the national average, but down 0.7% for the month to 57.5.
“The jump in COVID-19 cases is cause for anxiety in the small business sector, especially as some regions have renewed restrictions on businesses in the hospitality and personal services sectors, but the decline in optimism is pretty broad based,” said Ted Mallett, CFIB’s chief economist.
The index shows businesses were operating at a little under 71% capacity for the month, with no improvements since August. However, manufacturing showed an increase from 67% in September to 70%.
Hiring for manufacturers at 14% is just ahead of the 12% national figure, while reductions are planned by 22% of companies, compared to 28% of all businesses.
Business health is described as good by 26% of manufacturers compared to 31% of all businesses, and 29% said it was bad, compared to the 27% national average.
An index level nearer to 65 normally indicates that the economy is growing at its potential.
CFIB represents 110,000 small businesses, including manufacturers, across Canada.