Small business confidence, which saw steady erosion through 2015, is virtually unchanged in February. CFIB's Business Barometer® Index posted a barely perceptible 0.3-point monthly gain to 54.7, and it remains more than 12 points below its most recent October 2014 peak.

Business sentiment in the oil-producing provinces continues to pull downward on the national average. Alberta's index dropped further into record low territory at only 26.7, while Saskatchewan's and Newfoundland a Labrador's also fell to 52.4 and 53.5 respectively. Optimism in the remaining seven provinces, however, is noticeably better—led by Nova Scotia, Prince Edward Island and a resurgent business sector in Quebec—all with index levels above 65.

Confidence in Ontario, British Columbia, New Brunswick and Manitoba is more muted—with index values clustered around the 61 mark.

On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.

We are seeing some hopeful signs, with hiring expectations moving strongly upward this month, but recent Dollar instability has created problems for the import-reliant wholesale and retail industries. Pricing expectations are averaging a +2.4 per cent annual pace, which is almost double the expected increases to be applied to wages—a record gap.

The February 2016 report has been prepared by Ted Mallett, CFIB Vice-President & Chief Economist, and is available in its entirety on the CFIB website.