Small Business Optimism Is Up Slightly This Month, Says CFIB

The Canadian Federation of Independent Businesses (CFIB) released its “Business Barometer” this morning, indicating that small business optimism has trended into more positive territory this fall. But let’s call it “guarded optimism”.

The CFIB releases its Barometer Index every month to give the country a sense of how optimistic its small business owners are. October gained a half point to 65.0 from September’s reading, but it generally remains in line with the average value from the past four months.

“We are seeing pretty positive results from owners of professional services, manufacturing and natural resources businesses, but not exuberance,” said CFIB chief economist Ted Mallett. “On the other hand, those in transportation,finance, real estate and retail are somewhat less optimistic than the average. The most upbeat business owners are in Newfoundland & Labrador and British Columbia – both provinces seeing big gains.”

On a scale between 0 and 100, an index above 50 means owners are expecting their business’ performance to be stronger in the next year and those owners outnumber others expecting weaker performance. A score between 65 and 70 indicates that the economy is growing at its potential.

British Columbia and Alberta business owners scored in the positive range as well, at 70.7 and 70.4, in line with reports indicating that the western provinces are great places to start and maintain small businesses. Prince Edward Island and New Brunswick scored the lowest on the barometer, at a paltry 49.0 and 57.0, respectively.

The CFIB said the remaining indicators show a general level of stability. “Full-time hiring plans are basically unchanged this month and typical for this time of year, with 18 per cent expecting to hire and 12 expecting to downsize in the next few months,” said Mallett. “Forty-one per cent of owners report a generally good state of business, while orders and accounts receivables show gradual trending improvements. Pricing expectations have shown a slight increase lately, rising to 1.5 per cent annual growth, while wage expectations are trending just a little higher at 1.7 per cent.”

“Guarded optimism” might be the best term for how small businesses in Canada are feeling for October.

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