According to the latest Canadian Federation of Independent Business (CFIB) Business Barometer, small business confidence remained steady but muted in September. The 12-month outlook dipped one point to 52.5, while the short-term optimism sits at 49.5 index points.
“There’s been a slight ease on small businesses, but many challenges, including inflation and labour shortages, are still holding many firms back,” said Andreea Bourgeois, Director of Economics at CFIB. “Their sentiment held steady in September but with no improvement.”
Overall, 38% of businesses say they’re in good shape, while 18% say they’re in bad shape. Average price plans continue their downward trend, with companies expecting to increase prices by an average of 4.0%, while wages have remained at 3.1%.
Full-time hiring plans are muted, with only 18% of businesses looking to hire in the next three months and 19% planning to lay off. Skilled labour and input shortages limit business growth for 51% and 27% of small businesses. Additionally, fuel and energy costs (67%), wage costs (60%) and insurance costs (54%) were the top cost constraints for small businesses in September.
Over the short-term, businesses in Prince Edward Island registered the most significant drop but are still posting a moderate confidence level, alongside firms in Nova Scotia. Saskatchewan and Quebec are the only provinces to report levels above 50 (at 51.4 and 51.2, respectively).
“There’s not a lot of optimism among small firms who are feeling uncertain about the next three months. Heading into the fall season, governments must focus on small business priorities to help ease their financial burden,” Bourgeois said.