SMEs a bit less optimistic in April: CFIB
Manufacturers among the least confident during April’s slight decline.
TORONTO — The confidence of small business owners declined in a bit more in April, following a bigger hit in March, according to the Canadian Federation of Independent Business (CFIB).
Its Business Barometer index fell half a point from March’s 62.9 to 62.4. Confidence in March dropped 3.5 points.
Manufacturing was among the lowest sectors at 57.9, the highest being arts, recreation, info at 71.9. Agriculture showed the lowest confidence level at 55.3.
The CFIB said reports on new orders and accounts receivables have been down in recent months, although so are shortages of skilled labour, now reported by 29% of respondents, which is down from the mid-30s range in late 2012.
“The pattern across the country has been quite uneven,” said Ted Mallett, CFIB’s chief economist and vice-president. “If we look at the results by industry, the biggest declines in optimism occurred in manufacturing and retail, while the confidence of construction, wholesale and business services firm owners has remained steady.”
Confidence is highest in Newfoundland and Labrador (69.1), and rising in BC (67.6), which overtook Saskatchewan (67.2) and Alberta (65.3). Quebec (64.1) and Ontario (63.2) are just above the national average, while Manitoba (61.7) and New Brunswick (58.1) are below. Nova Scotia saw Canada’s biggest decline in business confidence (53.8), so PEI (55.1) is no longer the lowest in the country.
Top cost constraints noted by respondents were fuel, energy; and taxes, regulations, each at 60 points. Insufficient domestic demand was the top limitation on sales and production with a rating of 39.
TD Economics economist Leslie Preston said in a report that Canada’s economy slowed to a crawl in the second half of 2012, and while growth is expected to be better in Q1, it will likely remain sub-par.
“We don’t expect Canada’s economy to stage a convincing comeback until the second half of this year. Given that tepid backdrop, it is not surprising that business sentiment remained lacklustre in April,” said Preston.
The April 2013 findings are based on 1,184 responses from CFIB members and are statistically accurate to +/- 2.8% 19 times in 20.
CFIB represents Canada’s small and medium-sized businesses.
Click here for the report.