Small business confidence took some steps in the right direction at the end of April, gaining almost nine index points since the beginning of the month to 46.4 on the Canadian Federation of Independent Business (CFIB)’s Business Barometer, which was released on Wednesday.
“Small business sentiment is far from being in a state of recovery, but there are some signs of improvement this month, with business metrics like hiring and wage plans still low but seeing an uptick over last month,” said Ted Mallett, CFIB’s vice-president and chief economist, in a news release “This could be a reflection of more refined policy responses from government as well as businesses learning to operate more effectively under trying conditions.”
An index level nearer to 65 indicates that the economy is growing at its potential, said the CFIB.
The report said sentiment in Quebec improved, but the province remained at the lowest confidence level, along with Newfoundland and Labrador, at 32.1 index points. New Brunswick saw a large drop in confidence to 39.2, followed by Prince Edward Island (43.1), Manitoba (45.0) and Nova Scotia (45.3). Ontario (52.6) and Saskatchewan (50.8) saw improvements in sentiment and posted the highest results this month. Alberta (46.7) and British Columbia (46.0) also saw increases and maintained confidence levels close to the national average.
“Full-time staffing intentions improved slightly since the beginning of the month but remained low, with 9 per cent of business owners planning on hiring in the next three months, and 48 per cent planning to cut back. Capacity utilization rates also improved slightly to 39.9 per cent. In total, 11 per cent of owners say their business is in good shape, while 54 per cent say it is doing poorly,” said the CFIB.
“The natural resources sector registered no movement and had the lowest level of optimism at 33.3 index points, followed by financial services (38.9), information (39.0) and agriculture (39.5). The health services sector posted the highest confidence level (57.1), followed by personal services (49.7), hospitality (48.9) and construction (48.4).”
Alberta’s small business confidence took another step in the right direction increasing nearly 10 points in the second half of April to an index of 46.7 points.
“The increase in the Barometer is perhaps better described as moderating pessimism rather than improving optimism and indicates that some Alberta’s businesses are accessing federal and provincial support programs,” said Annie Dormuth, CFIB’s Alberta provincial affairs director. “However, as restrictions are gradually lifted businesses will need additional help to adjust to a new economic reality and be able to operate while following safe health practices and guidelines.”
Only four per cent of Alberta business owners say their business is in a good state, compared to 59 per cent who say their business is doing poorly. Hiring plans are still quite weak in Alberta with only seven per cent of business owners planning to hire full-time staff in the next three months, while half are planning for layoffs, said the report.
