Small business confidence fell to 60.5 in October, down nearly a point from August and September levels, according to the Canadian Federation of Independent Business (CFIB)’s Business Barometer index. Simultaneously, a record high of 47 per cent of businesses report that they are experiencing shortages of skilled labour, putting pressure on their ability to grow.
“The long-awaited resolution of the NAFTA negotiations has not yet brought peace of mind to small business owners,” said Ted Mallett, CFIB’s vice-president and chief economist. “Even regions that have been riding a confidence high, like PEI and Quebec, are seeing more muted outlooks this month, and business owners are finding it harder to fill vacant posts.”
Forty-three per cent of owners report that their business is in good shape this month, a slight drop from last month. Similarly, hiring intentions are down, with 16 per cent who plan to hire additional full-time staff in the next few months versus 14 per cent who plan to cut back.
An index level between 65 and 70 normally indicates that the economy is growing at its potential and a majority of owners expect their business’s performance to be stronger in the next year.
Provincial results: Narrowing confidence gaps
After a jump in confidence in September, Quebec saw the greatest drop this month, falling to 66.2 index points. PEI also lost confidence, but regained its spot as Canada’s most optimistic province. BC experienced the greatest confidence gain to 61.5 points. Ontario, New Brunswick and Manitoba all experienced optimism increases and trended above the national average. Nova Scotia, Newfoundland & Labrador, Saskatchewan and Alberta suffered confidence losses, with the latter three posting results significantly below the national average.
Industry results: Positive outlook
Most industries saw improvements in optimism levels, with only four sectors posting losses. Information and retail experienced the greatest confidence increases, while hospitality experienced the greatest decrease. Agriculture remained the least optimistic industry, but posted a modest gain in confidence. Professional services and health gained confidence and remained the most optimistic sectors.