Rise in optimism, but credit problems gathering speed
TORONTO, Oct. 16 /CNW/ - Coordinated actions by governments around the
world to backstop the banking system appear to be having a modest positive
effect on the country's small business sector, according to the second week of
results from a survey conducted by the Canadian Federation of Independent
Business (CFIB). Results show the Business Barometer index rising from 90.6
(revised) to 94.4 during the week of October 14, regaining some of the
confidence lost since early September. The index however, remains well below
its historical norms.
Despite the improved outlook from last week in respect to overall
optimism, CFIB's chief economist Ted Mallett said credit concerns appear to be
gathering speed. He pointed out the number of businesses reporting problems
accessing bank financing has risen to 28 per cent during the week of Oct. 14,
up from 26 per cent the week before.
Mallett said that although the balance of opinion continues to be
cautious, pockets of strength remain steady. He explained that five per cent
of business owners are looking to perform 'much stronger' in the next 12
months, while 29 per cent are expecting to be 'somewhat stronger'. Mallett
said only five per cent expect to be 'much weaker' in 12 months, with
29 per cent of business owners expecting to be 'somewhat weaker'.
Mallett also said the survey results indicate that employment markets
appear to be reasonably stable for now, with 25 per cent anticipating adding
to full-time hiring levels in the next 12 months, while 13 per cent now expect
to cut back. These are weaker numbers than traditionally found among employers
from this survey, said Mallett, but he added they appear to reflect the
importance small business owners place on maintaining skill sets and
experience within their workforces. "Cutting back on employment is typically a
last resort measure among small business owners," Mallett said.
It should be noted that these perspectives do not yet represent firm
plans by small business owners said Mallett, adding that developments in
financial and commodity markets are still too volatile and uncertain to allow
business owners to plan effectively. He further stated that growth may be
paused for the moment, but longer term performance of small- and mid-sized
enterprises will depend on how markets settle out over the next few weeks.
This special Barometer series is meant to fill the information vacuum for
business owners and policymakers looking for guidance. Usually conducted
quarterly, CFIB is running the Barometer survey on a weekly basis for six
weeks, having begun on October 6. These findings are based on 639 responses of
business owners surveyed between October 14 and 15, 2008. The survey was sent
to 8,000 randomly selected CFIB members on October 14, and conducted via a
secure web interface. Results can be considered accurate to within +/-/- 3.9
percentage points 19 times out of 20. The next survey will be sent to a new
list of 8,000 members on October 20, and results will be released on
October 23, 2008. Further details are available at www.cfib.ca.
For further information:
For further information: contact Gisele Lumsden at (416) 222-8022 or one
of our provincial offices