Business Barometer: It’s a cold January for small business confidence

Small business owners started off the new decade in a slump, according to the Canadian Federation of Independent Business (CFIB)’s latest Business Barometer®. The national optimism level fell 0.2 index points to 55.3.

“While Saskatchewan and Alberta are still the most downcast provinces, the rest of the country seems to be following their lead,” said Ted Mallett, CFIB’s vice-president and chief economist. “Staffing plans for the next three months, in particular, remain weak, with more business owners planning to lay off staff than those planning to hire.”

In total, 40 per cent of business owners say their firm is in good shape, while 16 per cent say it is in a bad state. Unfilled orders and accounts receivables performance also weakened this month.

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

Provincial results: Muted sentiment in most provinces

Alberta remained the least optimistic province in the country, dropping 1.3 index points to 37.0. Saskatchewan posted the second lowest confidence level at 42.7, despite also gaining the most index points of any province over last month (+2.7). Newfoundland and Labrador (48.6) and British Columbia (56.4) were the only other provinces to experience confidence gains in January, but still posted results at or below the national average. Prince Edward Island (65.3) and Quebec (63.5) were the most upbeat provinces, but both experienced confidence losses. Sentiment also slipped in Ontario (59.9), Nova Scotia (59.5), New Brunswick (59.4) and Manitoba (57.4), pushing them below the 60 point mark. 

Industry results: Hospitality sector drops to lowest confidence level

Hospitality slipped to the lowest sectoral spot in January, at 47.0 index points. The natural resources (48.7), transportation (50.6) and agriculture (51.0) sectors had the next lowest confidence levels, but were also the only sectors to experience confidence gains this month. The most optimistic sectors were health services (62.8), financial services (61.0) and professional services (56.3), but they also saw the biggest losses this month.

Read the January Business Barometer®