TORONTO – Confidence among small and medium-size businesses continued to fall in June, according to the latest survey from the Canadian Federation of Independent Business.
The CFIB says its index dropped from 64.8 in May to 62.1, essentially wiping out gains made since last summer when concerns about Europe’s debt situation burst open.
Business owners in Alberta, with an index of 73.3, and Saskatchewan at 72.5, have collectively been the most optimistic in Canada for 11 consecutive months.
Entrepreneurs in Manitoba are above the national average and those in Newfoundland and Labrador are close to average. Optimism lags in Ontario, Quebec, Prince Edward Island and Nova Scotia (56.4).
The index is on a scale of 0 to 100, with an index level above 50 meaning owners expect their businesses’ performance to improve in the next year. The CFIB says past results suggest index levels normally range between 65 and 70 when the economy is growing at its potential.
The June findings are based on 748 responses from CFIB members in a web survey. The findings are considered accurate to within 3.6 percentage points 19 times in 20.
“The weight of concern over the prospects for world economies continues to push business confidence down in Canada,” said Ted Mallett, CFIB’s chief economist and vice-president.
“If there is any good news, it is that our numbers suggest the economy is still growing, albeit at a slow pace.”
Declining confidence is prompting business owners to become more conservative in their hiring plans.
The CFIB says 15 per cent expect to increase full-time staffing levels in the next three to four months compared to 21 per cent who said the same in May. Twelve per cent said they will cut back, versus 10 per cent in May.
Overall, 40 per cent of business owners described their state of business to be in “good” shape, about three-times the 12 per cent who said their state of business is “bad.”