May 28, 2020 – Small business confidence has plateaued at the end of May, dropping by less than a full index point to 52.5 on the Canadian Federation of Independent Business (CFIB)’s Business Barometer®.
“Despite the easing of restrictions in some parts of the country and continuing government assistance programs, market conditions and uncertainty about the future are holding back many firms,” said Ted Mallett, CFIB’s vice-president and chief economist. “Capacity utilization is up a few percentage points since last week, but still below 50 per cent and staffing plans continue to trend towards cuts in the coming months.”
In total, 43 per cent of business owners said their business is in bad shape, while 14 per cent estimated that it is in good shape. Hiring plans are still low, with 13 per cent planning to add on full-time staff in the next three months, and 37 per cent planning to cut back. Insufficient domestic demand continues to be the biggest factor limiting sales and growth.
An index level nearer to 65 indicates that the economy is growing at its potential.
Provincial results: Prince Edward Island and Quebec trail rest of the country
Prince Edward Island posted the lowest optimism level at 30.0 index points, followed by Quebec (35.7), Newfoundland and Labrador (43.5) and New Brunswick (47.8). Nova Scotia (59.2), Ontario (57.1) and Alberta (55.5) had the highest optimism levels. Manitoba (50.0), Saskatchewan (51.9) and British Columbia (52.7) kept close to the national average.
Industry results: Natural resources and arts and recreation tied for lowest confidence level
The natural resources sector was tied with arts and recreation for the lowest sectoral optimism level at 37.5 index points, followed by agriculture (43.5). Meanwhile, health services and financial services tied for the highest optimism level at 59.4 index points. Most other sectors posted results close to the national average.
Read the May Business Barometer®
Mid-May 2020 findings are based on 1,281 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received on May 19 and 20. Findings are statistically accurate to +/- 2.7 per cent 19 times in 20.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.