Canadian business confidence still low, but hints of recovery show

Latest survey by national association shows upticks in hiring and wage plans, but results vary across areas

Canadian business confidence still low, but hints of recovery show

Sentiment among Canadian small business owners is still leaning toward the negative, but a new survey from the Canadian Federation of Independent Business (CFIB) suggests a marginal improvement over the past month.

In the latest edition of its Business Barometer survey, CFIB found that small business confidence gained almost 9 index points over the course of April, ending the month at 46.4 points. An index level closer to 65 indicates that the economy is advancing at its potential.

In a statement, CFIB Vice President and Chief Economis Ted Mallett noted that levels on business metrics like hiring and wage plans are still depressed, but are seeing an uptick over the previous month.

“This could be a reflection of more refined policy responses from government as well as businesses learning to operate more effectively under trying conditions,” Mallett said.

Intentions to strengthen full-time staff numbers have improved slightly since the start of the month, but remain low. Nine per cent of the business owners surveyed expressed plans to hire over the next three months, while 48% planned to cut back.

Capacity utilization rates registered a slight improvement, reaching 39.9%. Just 11% of owners said their business is in good shape, while just over half (54%) said theirs are doing poorly.

Sector-wise, the lowest level of optimism was observed in the natural resources sector at 33.3 index points. Weak sentiment also prevailed in financial services (38.9), information (39.0), and agriculture (39.5).

The highest confidence levels were found in the health-services sector (57.1), personal serves (49.7), hospitality (48.9), and construction (48.4).

Geographically, respondents from Quebec, along with those from Newfoundland and Labrador, reflected the lowest confidence levels at 32.1 index points. Confidence in New Brunswick fell dramatically to 39.2%, followed by Prince Edward Island (43.1), Manitoba (45.0), and Nova Scotia (45.3).

Ontario (52.6) and Saskatchewan (50.8) which both saw improvements in sentiment, also had the highest levels of confidence. There were also increases in Alberta and British Columbia, hewing close to the national average with 46.7 Points and 46 points, respectively.


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