The 12-month small business confidence index, which has been on a downward trend in recent months, saw a further drop of 1.5 points down to 47.2 in October. This is the lowest reading for this indicator since the onset of the pandemic in April 2020 and the third lowest monthly reading in close to 15 years, according to the Canadian Federation of Independent Business (CFIB) in its latest Business Barometer report.
Across the country, almost all provinces posted drops in confidence, with Quebec (46.1) and Ontario (46.5) registering the lowest long-term outlooks, said the report.
Simon Gaudreault
“While our Main Street Quarterly forecasts indicated last week that the economy will narrowly avoid a recession in the second half of this year, many signs still point to a lot of trouble for small businesses. We’re hearing from many businesses that they’re at full capacity and busy, but they’re not making a profit either. Inflation, financial pressures, labour challenges, uncertainty: name a business challenge and it’s happening in Canada right now,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
The CFIB report also found:
- Businesses’ average price and wage plans have shown improvement throughout 2023 and are sitting at 3.0% and 2.9% in October, respectively;
- October survey results show historically elevated shares of business owners remain worried about occupancy (29%), borrowing (44%), insurance (56%) and wage (66%) costs;
- The share of businesses reporting a shortage of skilled labour also increased slightly in October to 49% and is still higher than its historical average of 35%. Last week, CFIB’s Main Street Quarterly reported that vacancy rates have gone down in Canada in Q3, but that there were still close to 600,000 unfilled private-sector jobs, or almost 50% more than before the pandemic; and
- The share of small businesses reporting insufficient domestic demand has been on an upward trend since last spring and reached 43% in October, up from 39% in September. Businesses in retail (40.7) continue to be at the bottom of the optimism scale.
Andreea Bourgeois
“While the softening of the labour market as well as wage and price plans bring good news on the inflation front for businesses struggling to keep up with high costs, our different business indicators show their outlook remains quite difficult,” said Andreea Bourgeois, Director of Economics at CFIB. “And small businesses are very much wondering about what the next few months have in store, especially with the ongoing geopolitical situation and the looming Canada Emergency Business Account (CEBA) repayment deadline being less than three months away.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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