Small business confidence posts fifth consecutive monthly decline in August

Business Barometer®

TORONTO, Sept. 5, 2012 /CNW/ - Optimism among Canada's small- and medium-size businesses continued to decline in August, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer® index dropped from 60.9 in July to 60.0, a number that suggests very slow growth in the national economy.

"Canada's small business optimism continued its gradual downward slide in August with a fifth-consecutive monthly decline," said Ted Mallett, CFIB's chief economist and vice-president. "The survey results point to very slow growth. Just to keep things in perspective, the index is still more than 20 points higher than the recessionary low of 39.9 in December of 2008."

Optimism increased only in Newfoundland and Labrador (68.3), and Quebec (61.6). Across the country, confidence dropped sharply in Prince Edward Island (46.3), New Brunswick (60.5), Manitoba (58.1) and British Columbia (56.4), while smaller declines were observed in Ontario (58.4), Saskatchewan (69.5) and Alberta (67.9). Nova Scotia (54.4) saw little change from July.

"Concerns about shortages of skilled labour have increased over the past couple of months," added Mallett. "Insufficient domestic demand and shortages of suitably skilled labour were the most commonly cited constraints on business performance, both at 37 per cent."

Full-time hiring plans continue to be the bright spot in the survey results: 18 per cent of business owners plan to hire full-time staff in the next three or four months compared to 12 per cent who say they will cut back. While hiring plans are not as upbeat as they were in the spring, they are strong for this time of year. Overall, 41 per cent of business owners described their state of business to be in "good" shape, about three-times the 12 per cent who said their state of business is "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 70 when the economy is growing at its potential. The August 2012 findings are based on 903 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.3 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 further information:

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

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