Business Barometer®: Optimism remains sluggish; small businesses plan to increase wages in early 2018

Toronto/Calgary, December 28, 2017 – As we head into the new year, small business confidence remains muted across much of the country, according to the latest Business Barometer® survey, released today by the Canadian Federation of Independent Business (CFIB).

The monthly index measuring small business optimism edged up in December to 59.7 (out of 100), well below its 12-month peak of 66.0 in May 2017. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.

“Despite a growing economy, the concern over rising wages and taxes have many small businesses nervous about what the first few months of 2018 holds for them,” said Ted Mallett, Vice-President and Chief Economist at CFIB.

The survey does show a big jump in short-term wage expectations: over the next three months, small businesses plan to increase wages by 2.7 percent—by far the highest reading recorded since the survey was initiated in 2009.

Provincial Results: Quebec remains on top

Once again, business owners in Quebec are the country’s most optimistic—as they have been for much of 2017—with that index rising almost a point to 66.3. Larger improvements of more than three points came from British Columbia (64.3) and Alberta (60.1), while Saskatchewan (50.9) experienced the biggest drop in confidence.

Industry results: Retail and hospitality sectors are most pessimistic

Despite the holidays, business owners in the retail (53.7) and hospitality (44.5) sectors are the least confident heading into 2018; both industries saw big declines in December.

Conversely, the financial services, insurance and real estate sector saw the largest increase (+6.1) in confidence in December and is now the most optimistic industry group, with an index score of 66.1.

About CFIB

CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region. Learn more at cfib.ca.