Business Barometer: small biz confidence slips in April

April showers were not the only thing putting a damper on Canadians’ mood this month. There was a slight but broadly based drop in small business confidence levels, as measured by CFIB’s Business Barometer® Index, with seven of 10 provinces reporting a decline, shaving a point off the national index to 60.5.

“We’ve seen a cooling after last month’s rebound as the fallout from the shift in energy price fundamentals works its way through the economy,” said Ted Mallett, CFIB’s chief economist and vice-president. 

On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.

British Columbia led the way for a second consecutive month, bucking the national trend to climb to 71.9. However, the rest of the west didn’t fare as well, with Alberta dropping to 47.0, the lowest confidence level among the provinces, and Saskatchewan falling for the sixth month in a row to 50.0. Central Canada reported mixed results: Manitoba posted big gains, jumping six points to return to the national average at 60.2, while Ontario saw a three-point drop to 62.5. Quebec’s index fell slightly to 57.3 on a record-high number of businesses (14 per cent) reporting they are in bad shape.

The news was slightly better in Atlantic Canada. Nova Scotia and New Brunswick both saw optimism fall again in April but still remain above the national average. Nova Scotia dropped to 63.3 while New Brunswick slipped to 60.7. Newfoundland and Labrador saw confidence recover slightly, rising to 59.0, and Prince Edward Island led Atlantic Canada again with the second-best optimism level in the nation, a healthy 69.2.

April saw a general cooling in the small business economy, with only 39 per cent of business owners reporting their firms to be in good shape – a five-point drop from the levels late last year. Improvement was reported on the nation’s skilled labour shortage, as the 30 per cent of owners identifying it as a problem is the lowest level in two years...

This has been excerpted from the report prepared by Ted Mallett, CFIB Vice-President & Chief Economist, available on the CFIB website.