Business Barometer® - Small business confidence dips in April

TORONTO, May 2, 2012 /CNW/ - According to the Canadian Federation of Independent Business (CFIB) Canada's small and mid-sized businesses (SMEs) were a little less optimistic in April compared with the month before. The 1.3-point drop in CFIB's Business Barometer® Index to 66.4 gave back most of the big gains seen in the March survey findings. Still, it is the second-best reading for the year and the first decline registered in the Index since August 2011, when international financial markets seriously rattled economic confidence.

"For the most part, overall survey findings still point to stable business conditions and a modestly growing economy," remarked Ted Malett, chief economist and vice-president for CFIB. "The outlooks for business owners both by sector and by region show very little relative change in April, which is also another sign of general stability."

Business owners in Alberta (73.3) and Saskatchewan (72.1) continue to be the most optimistic in the country. The surge in optimism in Ontario in March was partially corrected in April—back to 67.1. Business sentiment in New Brunswick (68.0), British Columbia (66.9), Newfoundland and Labrador (61.9) and Prince Edward Island (62.2) improved. Optimism, however, fell back markedly in Manitoba to 65.2, while also dropping slightly in Nova Scotia (63.0) and Quebec (63.9).

"There was little change in the relative ranking of optimism by industry," commented Mallett. "Manufacturers remain the most positive by a significant amount; and confidence in the natural resources industries, business services and the health and education sectors are also above the average. Those in personal services and hospitality are at the low end of the index—around the 60 mark."

Hiring plans were positive in April with 21 per cent of business owners planning to increase full-time position over the next three or four months, while only 12 per cent plan to reduce them.

"Increased confidence in hiring is certainly strongly influenced by seasonal factors. The good news is that when compared to the results from this time last year, they are better than in April 2011," 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 April 2012 findings are based on 807 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.4 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 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.

For more information or to arrange an interview with Ted Mallett, contact Meghan Carrington or Gisele Lumsden at 416 222-8022 or email [email protected]