Business Confidence Holds Steady

The latest Business Confidence Index shows business leaders are more optimistic about the future of their own firms than about the economy as a whole

Written by Mira Shenker

Canadian business owners have remained confident this quarter, even during the lead-up to the U.S. government shutdown.

Only 9% of respondents to the Conference Board of Canada‘s latest Business Confidence survey said they expect economic conditions to worsen; 29% of respondents said they believe economic conditions will be better six months from now; 61% said it would be the same. Though not as wide as last quarter, the 20-point difference between the share who believe conditions will get better and the share who say it will get worse is an encouraging sign for the Canadian economy.

Business leaders are more optimistic about the future of their own firms than about that of the economy as a whole, a consistent trend since the recovery slowed in mid-2010. When asked whether they expect their firm’s financial position to improve over the next six months, 43% of respondents said they did. It’s a positive result, though it has dropped since the last survey, when 48% of respondents said they expected their financial position to improve.

That drop in optimism about the future finances of Canadian businesses could reflect a perception that the outlook for the Canadian economy is less bright today than it was this past summer.

Even so, businesses are eager to invest in growth: the number of respondents planning to boost major investment spending by 10% or more rose 3 percentage points. Reported rates of return improved slightly from last quarter, with 15% of respondents reporting that their firm’s rate of return was better than they expected six months ago, though 24% reported worse-than-expected rates of return.

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