CFIB Business Barometer posted an increase in November
Canada’s small businesses indicated they were slightly more confident this month, but a key measure was below expectation.
The Canadian Federation of Independent Business’ Business Barometer index was up 0.7 points to 61.2 with 42% of owners saying their business is in good shape compared to 11% who say it’s in bad shape.
“Business confidence hasn’t grown as would be expected compared to the current GDP growth,” said Ted Mallett, CFIB’s vice-president and chief economist. “Most provinces, however, are showing lower confidence levels compared to last month. Even Quebec, which reached record high confidence levels in September, plummeted below the national average.”
There is also a return to seasonal levels for hiring intentions with 18% of business owners planning to hire additional full-time staff in the coming months compared to 14% who expect to cut back.
Provincial variations
PEI remains the most optimistic province with a reading of 69.2 despite a slight weakening in confidence this month.
Quebec saw the largest drop in optimism and recorded 60.9 on the index, while New Brunswick saw the largest rise, reaching 67.2.
British Columbia experienced a modest gain to 63.1 points. Ontario and Manitoba lost confidence but remained near the national average. Nova Scotia, Alberta, Newfoundland and Labrador and Saskatchewan all remained below the national average.
Sectors were split with 7 of the 13 losing confidence and the other 6 posting only modest gains.
Could be better says TD economics
TD Economics have reacted to the CFIB’s index saying that it could be better and pointing to weakness in resources-heavy provinces, but also highlighting that it does not paint a negative picture.
“Capacity constraints continue to be a key theme, with shortages of skilled labour consistently cited as a factor limiting firms' ability to expand,” writes economist Omar Abdelrahman.
He adds that increase in capital expenditure and hiring plans are all indicative of the economy operating at potential but that “current weakness in commodity prices, especially oil, cast doubt on the ability of the index to reach the 65-70 range cited by CFIB as consistent with an economy operating at its potential.”
Canadian small business confidence almost unchanged in November https://t.co/SOcf1YTIvW #cdnecon #CFIB pic.twitter.com/4yE1GlOQSJ
— Beata Caranci (@TD_Economics) November 29, 2018
