Quarterly Business Barometer - Small business outlook holds firm - CFIB



    TORONTO, March 26 /CNW/ - Small businesses are maintaining a cautious
outlook in light of uncertainty in financial markets, energy markets and
concerns about the faltering US economy, the latest survey of business
optimism by the Canadian Federation of Independent Business shows. Latest
expectations push the Business Barometer index down only slightly from the
previous quarter, but still well below past norms.
    "Although lower than most other quarterly results in the past few years,
the findings are still far from plumbing the depth of pessimism," CFIB's Chief
Economist Ted Mallett says. "Nationally, CFIB's quarterly Business Barometer
is at 104.0, down from 104.2 in December, and optimism remains strong in
several provinces."

    The provincial picture

    This quarter saw declines in business optimism in Alberta, British
Columbia, Ontario, Quebec and Prince Edward Island. Alberta's index hit a
five-year low of 102.8. Businesses in Prince Edward Island fell below the 100
mark for the second time in the past three quarters. Manitoba remains steady
at 103.6.
    Newfoundland and Labrador businesses are the most optimistic, with their
index rising for the fourth consecutive quarter to 119.6, with businesses in
Saskatchewan at a close second at 116.1. Business owners in Nova Scotia and
New Brunswick have slightly stronger outlooks than those in the rest of the
country.

    By sector

    Seven out of ten industry groupings in the survey saw a decline, the
largest being in manufacturing with the index down to 100.0. Wholesalers are
experiencing a similar decline with an index level of 102.2. Once again the
agriculture index has dropped to mid-90 levels, with livestock, cattle and
horse sectors facing high fuel costs, high feed costs and high input costs.
The most pessimistic businesses for the second consecutive quarter are
transportation companies, which are facing higher fuel prices, concerns of
lower shipments and continuing border issues.
    The consumer-focused hospitality and retail sectors continue to hold
their own, performing reasonably well. And, the financial and social services
sectors, which traditionally show the highest levels of business optimism, are
once again at the top of the list.

    The Canadian dollar

    Now that Canadian businesses have lived with dollar parity for the past
six months, more are sharing the strain. Export-oriented manufacturers and
transport companies, in particular, are hit doubly by poor exchange rates and
slow market demand south of the border.

    Employment, wage and pricing plans

    Employment expectations remain reasonably upbeat. Approximately 30 per
cent of business owners hope to have greater numbers of full-time staff 12
months from now -- down one per cent from December. Unfortunately, the numbers
expecting to have fewer full-time staff also increased another percentage
point this quarter.
    Businesses in Newfoundland and Labrador, New Brunswick, Saskatchewan and
Manitoba are the most likely to have plans for increased full-time staff
levels. Businesses in Alberta and British Columbia have cooled their hiring
plans considerably -- from 37 per cent and 41 per cent respectively in
December, to 33 per cent in March.
    Salary pressures, however, seem to be easing a little faster. Consistent
with previous December findings, only 37 per cent of business owners are
expecting to have to raise wages by more than two per cent in the next 12
months -- well below levels from mid-2007.
    "Across the board, concerns remain largely the same -- energy prices, the
US economy and the exchange rate," Mallett says. "But, although slowing,
Canada's small business economy does not appear to be following the same
extreme path as the US."
    The survey was conducted via fax and e-mail from March 3-17, 2008 and
drew 2,048 responses. It is accurate +/-2.2 per cent 19 times out of 20. The
full report and provincial details are available at www.cfib.ca

    CFIB is Canada's largest association of small- and medium-sized
businesses. Encouraging the development of good public policy at the federal,
provincial and municipal levels, CFIB represents more than 105,000 business
owners, who collectively employ 1.25 million Canadians and account for $75
billion in GDP.

    Business Barometer is a quarterly publication of the Canadian Federation
of Independent Business and is a registered trademark.




For further information:

For further information: Judy Langford or Gisele Lumsden at (416)
222-8022


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