Business Barometer® - Small business optimism rises slightly heading into 2012

TORONTO, Feb. 1, 2012 /CNW/ - Optimism among Canadian small- and mid-size businesses continues to improve, but at a reserved pace according to the Canadian Federation of Independent Business (CFIB). The Business Barometer Index ended January at 65.2—just slightly above the 65.0 registered in December but, not enough to register as a statistically significant movement.

"The Index remains below what it had been at any point between January and July of 2011, revealing the economy is growing, but not at the pace we had seen at this point last year," said Ted Mallett vice-president and chief economist for CFIB.

The East-West divide on economic performance continues. Alberta businesses lead the way as Canada's most optimistic with an index level at a very healthy 73.3. In fact, all four Western provinces are well above the national average. Ontario and Quebec businesses slide in just below average, while those in the Atlantic region remain least optimistic.

Disappointing performance in the retail sector in December carried into the New Year. Sub-par index levels are also emanating from the hospitality and transportation sectors. "There are signs of strength though, the natural resources sector including manufacturing and wholesale industries remain quite upbeat, with index levels approaching 70. And, finance, insurance and real estate industries also appear to have shaken off some of its earlier caution," commented Mallett.

With sixteen per cent of business owners expecting to add to their full-time staffing levels in the next three or four months, and about 12 per cent with plans to cut back, the data is showing full time employment plans have started to climb again. The net difference of +4 per cent is common for this time of year, when seasonal businesses start preparing for spring-time expansion.

After showing a pause in the later months of 2011 with uncertainty around Europe's economies at its height, small business investment plans appear to have steadied and resumed their gradual climb. In January, there were improvements in all four categories of investment intentions.

"Inflationary pressures appeared to have eased off in January. Businesses expect both their selling prices and wage rates to increase roughly by 1.5 per cent in the coming 12 months—well under their views in December," concluded Mallett.

Measured on a scale between 0 and 100,  an index level above 50 means owners expecting their businesses' performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing.  The January 2012 findings are based on 946 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.2 per cent 19 times in 20.

As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 108,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.

SOURCE CANADIAN FEDERATION OF INDEPENDENT BUSINESS

For further information:

For more information or to arrange an interview with Ted Mallett, contact Meghan Carrington or Gisele Lumsden at 416 222-8022 or email public.affairs@cfib.ca 

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CANADIAN FEDERATION OF INDEPENDENT BUSINESS

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