Business confidence among Canada’s small and medium-sized businesses lost ground in December, suggesting that the economy is still only recovering at a gradual pace. According to the latest business confidence survey findings from the Canadian Federation of Independent Business (CFIB), the Business Barometer(R) index fell to 63.7 in December, from 68.0 a month earlier. The Index has still to match its September ’09 peak of 68.7, showing customer demand growth remains below par.
The decline in optimism was broad based, falling in 10 of 13 industry categories and in 8 of 10 provinces.
“This is the lowest level since June and July of 2009,” stated CFIB’s vice-president of research and chief economist, Ted Mallett. Adding, “Small business owners are reminding us that we aren’t out of the woods yet. Further to government stimulus packages, there’s a large tax bill that now needs to be dealt with and the business community is increasingly worried on the growth slowdown.”
According to Mallett, the personal services sector as well as the retail sector performed above the average (70.3 and 66.0), which means the important holiday season was at least reasonably positive for those businesses. However, the hospitality industry is still feeling the effects of tight consumer spending, and activity in the important manufacturing and construction sectors is settling back somewhat after their partial rebound earlier in the fall with the increased value of the Canadian dollar.