Small business confidence took some steps in the right direction at the end of April, gaining almost 9 index points since the beginning of the month to 46.4 on the Canadian Federation of Independent Business (CFIB)’s Business Barometer®.
“Small business sentiment is far from being in a state of recovery, but there are some signs of improvement this month, with business metrics like hiring and wage plans still low but seeing an uptick over last month,” said Ted Mallett, CFIB’s vice-president and chief economist. “This could be a reflection of more refined policy responses from government as well as businesses learning to operate more effectively under trying conditions.”
Fulltime staffing intentions improved slightly since the beginning of the month but remained low, with 9 per cent of business owners planning on hiring in the next three months, and 48 per cent planning to cut back. Capacity utilization rates also improved slightly to 39.9 per cent. In total, 11 per cent of owners say their business is in good shape, while 54 per cent say it is doing poorly.
An index level nearer to 65 indicates that the economy is growing at its potential.
Provincial results: Sentiment in Eastern Canada remains muted
Sentiment in Quebec improved, but the province remained at the lowest confidence level, along with Newfoundland and Labrador, at 32.1 index points. New Brunswick saw a large drop in confidence to 39.2, followed by Prince Edward Island (43.1), Manitoba (45.0) and Nova Scotia (45.3). Ontario (52.6) and Saskatchewan (50.8) saw improvements in sentiment and posted the highest results this month. Alberta (46.7) and British Columbia (46.0) also saw increases and maintained confidence levels close to the national average.
Industry results: Natural resources sector has the lowest outlook
The natural resources sector registered no movement and had the lowest level of optimism at 33.3 index points, followed by financial services (38.9), information (39.0) and agriculture (39.5). The health services sector posted the highest confidence level (57.1), followed by personal services (49.7), hospitality (48.9) and construction (48.4).
Changes in Barometer release schedule
Due to rapidly evolving economic conditions impacted by the global COVID-19 pandemic, CFIB has increased the frequency of its Business Barometer Survey from monthly to bi-monthly through June 2020. CFIB will release results for early May on May 14.
Read the April Business Barometer®