Small business optimism in Canada
November’s report on the Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, has shown its third consecutive decrease in optimism – dropping 1.5 points to 45.6.
The short-term optimism index, based on a 3-month outlook, lost three points, and reached 37.7, a level not seen since January 2022.
12-month and 3-month small business confidence index, Canada
Provincial picture
Long term optimism in nearly all provinces decreased further in November. Confidence in Central Canada remained at abysmal levels:
- 42.0 in Quebec and 45.4 in Ontario.
Manitoba and PEI are the only provinces where the outlook seems somewhat better with confidence levels in the mid-fifties.
Small business confidence index – provinces
Sectoral picture
Overall, almost all industries are on downcast paths over the short and long term. The services sectors, except hospitality and transportation, are doing somewhat better.
- Levels above fifties for information, arts, and recreation; health and education; personal services and professional services.
- All other industries are below the 50 mark, with agriculture being as low as 32.4.
Small business confidence index, sectors
Inflation indicators
Average price increase plans for the next 12 months zigzagged back to 3.1%. Over the past four months, this indicator oscillated between 3.0 and 3.1 but it hasn’t dropped yet to the 2% range.
Average wage plans dropped slightly to 2.6%, significantly lower than November’s 2022 level of 4.0%.
Future price and wage increase
Demand indicators
Concern over insufficient demand has increased this month as reported by 46% of small business owners. Several other indicators, such as below normal unfilled orders, also pointed to signs of slowed demand.
Factors limiting sales or production growth – current levels and trend
Major input cost constraints – current levels and trend
Supply chain indicators
Steering a business through the ever-evolving economic landscape requires insight and foresight. The Business Barometer report is a valuable tool to help guide small business owners through the currents of optimism, challenges, and trends.
Consider PFG Financial as your personal resource to help you navigate the business world. Contact us today!
ADDITIONAL RESOURCES
Business Barometer® National Summary
https://www.cfib-fcei.ca/hubfs/research/mbb/Business-Barometer-National-Summary-2023-11.pdf
Business Barometer® Provincial Summaries
https://www.cfib-fcei.ca/hubfs/research/mbb/Business-Barometer-Provincial-Summaries-2023-11.pdf
Business Barometer® Industry Summaries
https://www.cfib-fcei.ca/hubfs/research/mbb/Business-Barometer-Industry-Summaries-2023-11.pdf
Business Barometer® Data Table
https://www.cfib-fcei.ca/hubfs/Business-barometer-data-donnes-2023-11.xlsx
