Small business confidence saw partial recovery in February, rising 5.2 index points to 60.5 on the Canadian Federation of Independent Business (CFIB)’s latest Business Barometer®. 

“It looks like there is some cautious optimism in the small business sector early in the month,” said Ted Mallett, CFIB’s vice-president and chief economist. “Most provinces and sectors improved their outlook over January views. Other indicators of business health, such as hiring intentions and accounts receivable, are steady but weaker than normal. It should be noted that the survey period covered the early part of February, which will not fully reflect emerging business concerns over the Coronavirus and transportation network blockages.”

In total, 41 per cent of business owners say their firm is in good shape, while 14 per cent say it is in a bad state, a slight improvement over last month. Hiring intentions also improved but remained weak for the time of year, with 15 per cent planning to hire full-time staff in the next three months, and 13 per cent planning to cut back.

An index level nearer to 65 indicates that the economy is growing at its potential. 

Provincial results: Sentiment in western provinces continues to lag

Quebec jumped to the top spot this month, gaining 4.8 index points to 68.3, followed by Ontario (64.4) and New Brunswick (61.6). Nova Scotia (59.7) and Prince Edward Island (58.3) posted results close to but below the national average. Sentiment continued to lag in western provinces and Newfoundland & Labrador (48.6). Manitoba (55.1) lost 2.3 index points, while British Columbia remained stagnant at 56.2. Despite some gains, Saskatchewan (47.6) and Alberta (39.6) remained the least optimistic provinces.

Industry results: Optimism rises in most sectors

Sentiment in all but two sectors improved in February. Transportation lost 2.0 index points to 48.6, the lowest sectoral optimism level, while financial services fell 1.4 points to 59.6. Agriculture (51.5) and hospitality (52.6) also posted optimism levels well below the national average. The natural resource sector (57.6) and the retail sector (61.0) posted the biggest confidence gains—8.9 and 8.6 index points respectively—though confidence in natural resources remained below the national average. Health services (65.3) and professional services (63.7) were the most optimistic sectors.

Read the February Business Barometer®