SME Confidence Remains Steady in August
Small business confidence remained stable but low in August, according to the latest Canadian Federation of Independent Business (CFIB) Business Barometer®. The short-term optimism index gained three points, climbing to 50.0, while the 12-month outlook reached 53.5, a slight increase of 0.8 points since July.
“Small business owners continue to feel the pressures of higher costs and labour shortages, and they’re taking a wait-and-see approach,” said Simon Gaudreault, Chief Economist and Vice-President of Research at CFIB. “They are cautious about the future, and that impacts confidence, hiring plans, and business growth plans.”
The share of businesses in good shape increased to 37% in August, compared to 32% in July. Hiring plans haven’t changed much, with 20% of firms planning to hire full-time staff and 15% looking to lay off.
Among provinces, Prince Edward Island continues to be the most optimistic over the short- and long-term. On the other hand, Newfoundland and Labrador posted the lowest confidence levels over both periods.
Average price increase plans are trending down from May’s high of 4.9%, currently sitting at 4.2%. Average wage plans have also decreased to 3.1%, after having peaked at 3.6% in June.
Skilled and semi- or unskilled labour shortages continue to be the top factors limiting business growth (52% and 37% of businesses are experiencing them, respectively). Fuel and energy costs have remained the top cost constraint for 72% of small firms.
“The indicators of business health show that a lot of business owners are still uncertain and hesitant about the future,” said Andreea Bourgeois, Director of Economics at CFIB. “As we head into the fall season, governments need to keep in mind that many businesses are still struggling.”