TORONTO, June 6, 2012 /CNW/ - Confidence among Canada's small- and medium-size businesses became more subdued in May, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer® index dropped a further 1.6 points after a 1.3 point decline in April, landing at 64.8 - its lowest reading since November.
"For the most part, optimism in Canada is being kept in check by financial market jitters emanating from Europe," said Ted Mallett, CFIB's chief economist and vice-president. "Broadly speaking, however, most of the economic fundamentals are still a net positive. Most importantly, business plans for jobs and investment remain in growth territory."
Business owners in Alberta (72), Saskatchewan (72.2) and British Columbia (67.7) are the most optimistic in Canada. Conversely, optimism dropped significantly in Ontario (61.1) and Nova Scotia (59.5), bringing their index levels close to the 60-point mark, alongside Prince Edward Island (58.5) and Newfoundland and Labrador (60.0). The remaining provinces: Quebec (63.3), New Brunswick (63.5) and Manitoba (63.5) are all about a point shy of the national average.
"Aside from natural resources and the health-services sector, which show a lot of confidence, business owner optimism in most industries remains tightly grouped in the low-to-mid 60s," commented Mallett. "The overall drop in confidence can particularly be seen within the goods sectors - agriculture, manufacturing and construction, although retail and hospitality have held steady or made small gains."
There is some good news: 21 per cent of business owners plan to increase full-time staffing levels in the next three to four months, while only 10 per cent plan to cut back. Similarly, 40 per cent of business owners describe their state of business to be in 'good' shape, which is almost three times the 14 per cent of owners who characterize the overall situation as 'bad'.
Measured on a scale of 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 May 2012 findings are based on 795 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.5 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.
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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]