Optimism among Canada’s small- and medium-size businesses continued to decline in August, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer index dropped from 60.9 in July to 60.0, a number that suggests very slow growth in the national economy.
“Canada’s small business optimism continued its gradual downward slide in August with a fifth-consecutive monthly decline,” said Ted Mallett, CFIB’s chief economist and vice-president. “The survey results point to very slow growth. Just to keep things in perspective, the index is still more than 20 points higher than the recessionary low of 39.9 in December of 2008.”
ptimism increased only in Newfoundland and Labrador (68.3), and Quebec (61.6). Across the country, confidence dropped sharply in Prince Edward Island (46.3), New Brunswick (60.5), Manitoba (58.1) and British Columbia (56.4), while smaller declines were observed in Ontario (58.4), Saskatchewan (69.5) and Alberta (67.9). Nova Scotia (54.4) saw little change from July.
“Concerns about shortages of skilled labour have increased over the past couple of months,” added Mallett. “Insufficient domestic demand and shortages of suitably skilled labour were the most commonly cited constraints on business performance, both at 37 per cent.”
Full-time hiring plans continue to be the bright spot in the survey results: 18 per cent of business owners plan to hire full-time staff in the next three or four months compared to 12 per cent who say they will cut back. While hiring plans are not as upbeat as they were in the spring, they are strong for this time of year. Overall, 41 per cent of business owners described their state of business to be in “good” shape, about three-times the 12 per cent who said their state of business is “bad.”