Small business confidence fell sharply in June, and is now at its lowest point since July 2009, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer® index fell almost three points to 59.4 from May's 62.1, a fourth consecutive monthly decline.
"Weak demand appears to be driving this," said Ted Mallett, CFIB's chief economist and vice-president. "Only 73 per cent of respondents report that new orders are "normal" or better, while 40 per cent say domestic demand is limiting business expansion—both out of tune with recent results."
The drop in optimism is centred almost entirely in Ontario and Quebec (56.8 and 55.3, respectively). Confidence remains strongest in Alberta (68.6), with Saskatchewan (67.3) edging up. Newfoundland and Labrador (66.3) and British Columbia (65.6) are also above the national average. There is very little change in the under-performing Maritimes, with New Brunswick (59.2) hanging around the national average, and Nova Scotia (53.6) and Prince Edward Island (53.3) lagging behind. By sector, construction, natural resources and hospitality were weakest, while the information and financial services sectors remained strong.
"Despite weak results, there are signs we are nearing a floor," added Mallett. "Short-term employment plans are net positive, while reporting of the general state of business health is holding steady."