Business Barometer: Confidence among Canada’s SMEs saw little change in December

Confidence among Canada’s small and midsized business owners saw little change in December. CFIB's monthly Business Barometer Index is up only a fraction of a point to 59.7 this month from November’s 59.3. The index is finishing its year close to where it had started, but it is still well below its May 2017 peak of 66.0.

Once again, business owners in Quebec are the country’s most optimistic with that index rising almost a point to 66.3. Larger improvements of 3+ points came from British Columbia (64.3) and Alberta (60.1), while Nova Scotia (60.8) rounded out the list of provinces with Index scores above the 60 mark. Manitoba’s index popped up by two points to 57.4, but sentiment fell back slightly in Ontario (57.5), Saskatchewan (50.9) and New Brunswick (50.8). There was not very much change in conditions in Newfoundland & Labrador (50.0) and Prince Edward Island (56.5).

Aggregate results for 2017 by major city showed similar results, with businesses in Quebec City, Montreal and Halifax the most optimistic, while those in Regina, Edmonton and Calgary the least. 

The industry picture varied. Although only 4 of 13 sector groupings showed declines in optimism this month, the movements were large. Retail (53.7) and hospitality (44.5) businesses are the most pessimistic, with index declines of 2 and 5 points respectively. Much bigger declines were seen in natural resources and professional services, though they were coming off relatively strong November readings...

Short-term employment plans weakened off some more in December, but that is common for this time of year. The 19 per cent of businesses expecting to cut back on full-time staff levels, however, is the largest proportion seen since briefly late 2016 and during the 2008-09 recession. Wage plans are also of note, with hikes averaging 2.7 per cent over the next 12 months—compared to 2.1 per cent gains in planned pricing.

The following related documents, prepared by Ted Mallett, CFIB VP and Chief Economist, are available on the CFIB website: Business Barometer, Provincial summaries, Industry summaries.