Business Barometer: New season doesn’t bring new confidence to small business sector

Small business confidence rose slightly in June to 54.6 points on the Canadian Federation of Independent Business (CFIB)’s Business Barometer®, two points higher than May’s reading but still well below historical norms. 

“Despite more of the economy reopening, challenging operating conditions are preventing small businesses from being reliably profitable and sentiment is only cautiously improving,” said Ted Mallett, CFIB’s vice-president and chief economist. “Businesses are operating at only 58 per cent of capacity on average, and many fear future COVID-19 outbreaks could renew closures and interruptions.” 

In total, 39 per cent of business owners said their business was in bad shape while 19 per cent said it was in good shape—slight improvements over May. Hiring plans remain low, with 14 per cent of business owners expecting to add full-time staff in the coming months compared to 33 per cent who foresee cuts. 

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

Provincial results: Prince Edward Island rebounds, Quebec still trails the rest of Canada

Nova Scotia had the highest optimism level in the country (62.3), followed by Prince Edward Island (60.9). Quebec had the lowest optimism level (38.1) followed by New Brunswick (46.6). British Columbia (53.6) and Ontario (54.0) posted results near the national average, while Manitoba (55.3), Alberta (55.7), Newfoundland and Labrador (58.3) and Saskatchewan (59.1) modestly exceeded it.

Industry results: Natural resources claims lowest confidence level

The natural resources sector posted the lowest sectoral optimism level at 40.0 index points, followed by arts and recreation (44.1) and agriculture (45.3). Wholesale (61.2) and financial services (60.6) had the highest optimism levels and were the only sectors to top 60 index points. All other sectors ranked within five points of the national average. 

Read the June Business Barometer®