Euro crisis weakening SME confidence: CFIB
Survey suggests Canadian firms are more pessimistic about unfolding global economic conditions.
OTTAWA: Canada’s small and medium-sized firms are feeling more pessimistic about unfolding economic conditions, a new survey suggests.
The Canadian Federation of Independent Business survey for May dropped a further 1.6 points on top of a setback in April.
At 64.8, the index is now at its the lowest level since November.
CFIB economist Ted Mallett says despite relatively strong fundamentals, optimism in Canada is being kept in check by financial market jitters emanating from Europe.
Not surprisingly, confidence was higher in western Canada, where resource-based economies have performed better than those of the rest of the country in recent years.
Confidence was highest in Alberta and Saskatchewan with a readings of about 72, and lowest in Nova Scotia and Prince Edward Island, both below 60. The Ontario index was only slightly better at 61.1.
“Until it is clear that the situation in Europe has been contained, Canadian businesses are unlikely to gain much confidence,” TD Bank economist Dina Cover said in reference to the survey findings.
There was a thin silver lining in the report. About one in five of the 795 firms that made up the survey said they planned to increase full-time staffing in the next three or four months.
In a separate report, the Conference Board’s Help-Wanted Index resumed its upward trend in April, rising 2.2 percentage points.
After a half-year of largely flat employment, the economy created 140,000 new jobs in March and April. Statistics Canada will release the results for May on Friday.
©The Canadian Press