Business Barometer: Small business confidence dips in May

May 31, 2016

Canadian small business sentiment eased downward in May, giving back some of the improvement noted the month previously. CFIB's Business Barometer® Index dropped by one point to 58.2 in May from April's 59.2, but it is still much improved from levels in the first three months of 2016.

Once again PEI business owners are the most upbeat in the country, with an index value now at a post-recession high of 75.0. The outlooks of owners in British Columbia (67.1) and Ontario (65.8) are also the most positive since mid- to early 2015. Modest rebounds were also seen in Alberta (34.6) and Saskatchewan (51.5), though sentiment there remains well below national averages. Optimism in Manitoba (57.7) also improved this month, though just back to Canada-wide levels.

Business owners in east of the Ottawa River, however, were generally a little less upbeat in May. Those in Nova Scotia (63.9) and Quebec (60.6) still outpoint the Canadian average, while those in Newfoundland and Labrador (44.6) and New Brunswick (57.0) moved a little further away on the down side.

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.

The rest of the business indicators from the survey, while stable, still show below par conditions. Hiring plans look reasonably good for this time of year, but the number of business planning to cut full-time staffing remains elevated. Capital spending plans are returning to long-term averages, but concerns around the state of order books and accounts receivables still linger.

The full report, prepared by Ted Mallett, CFIB Vice-President & Chief Economist, is available on the CFIB website.


Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
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