Small business outlook points to sluggish recovery
Proportion of businesses in bad shape has dropped and is now on par with those who say they are in good shape.
TORONTO — The 12-month small business outlook dipped two index points to 59.2 in August on the Canadian Federation of Independent Business (CFIB)’s Business Barometer. The three-month outlook remains significantly lower at 40.9 points.
“What ‘good performance’ means has changed for small business owners. Many may see just being here in 12 months as success,” said Ted Mallett, chief economist at CFIB. “Key performance indicators point to a sluggish but steady recovery, but capacity utilization remains low, particularly in the hospitality and arts and recreation sectors.”
The proportion of businesses in bad shape (26%) has dropped and is now on par with those who say they are in good shape (27%). A quarter of businesses plan on reducing full-time staff in the next three months, while 13% plan on hiring.
Manufacturers registered a 56.8 on the index, up 3.2 points from the previous month but below the national average. Business is good good for 21% but bad for 29%. Over the next three months 21% won’t be hiring compared to 12% who will. Capacity utilization is up at 64% compared to 59% in July.
An index level nearer to 65 indicates that the economy is growing at its potential.
Nova Scotia was the most upbeat province at 68 index points, followed by Alberta (64.3), Ontario (63.1) and Saskatchewan (62.9). Quebec (43.9), PEI (47.9) and New Brunswick (56.5) were the most downcast provinces. Newfoundland and Labrador (60.6), Manitoba (59.3) and British Columbia (58.2) stuck close to the national average.
The CFIB is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region.