– The CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region.
CANADA – Canada’s small business optimism is on the rise again in April. The monthly Business Barometer Index, put out by the Canadian Federation of Independent Business, gained a point and a half to finish the month at 64.4—its best level since November 2014.
“The Index is less than a point shy of its 2010-14 average,” elaborated Ted Mallett, Chief Economist at CFIB. “This suggests that while lingering effects of the oil price shock persist in some regions, business expectations are readjusting to a new set of economic drivers.”
April’s national gains were supported mostly by strong optimism growth in Ontario (68.7), British Columbia (67.1) and continuing improvements in business sentiment in Alberta (57.9). Relative weakness, however, persists in Newfoundland & Labrador (43.8) and Saskatchewan (55.1), which have both seen little improvement in optimism levels for a number of months.
There is broad uniformity, though, in the remaining provinces, where index levels cluster around the mid-60s, suggesting general robustness to the business outlook.
The comparative consistency of outlooks among industry groups is also a positive sign. Indexes are up in 8 of 13 sectors, led by optimism in financial services (which includes real estate) at 70.8 and wholesale trade and hospitality near 68. Even the weakest sector this month, information, arts and recreation at 58.7, is not all that weak compared to the historical context—which can display large swings from month to month.
“Most other indicators of business health are showing reasonably positive signs” added Mallett. “And though employment plans remain subdued compared to previous April results, this constitutes no real surprise – after all, it took almost three years past the 2009 recession for this indicator to recover.”
- On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.
