Canadian businesses have lost confidence and hiring intentions are unusually weak
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Concerns about the forward progression of Canada’s economy continue to appear with small businesses revealing their weakening confidence in a new poll.
The Business Barometer from the Canadian Federation of Independent Business ties in with lower consumer confidence, slowing consumer demand, trade pressures, and concern over the US economy.
“This is one of the worst readings we’ve seen in the past three years,” said Ted Mallett, CFIB’s vice-president and chief economist. “It’s not typical for hiring intentions to be so low at this time of year, as businesses should be gearing up for the busier spring and summer seasons, but it’s indicative of the low level of optimism that private-sector firms are reporting.”
Less than half of owners (43%) say their business is in good shape, while 14% say it is in bad shape.
Despite talk of the strong labour market, just 17% of business owners are planning to hire full-time staff, while 15% plan to cut back. Plans to increase wages and prices also dropped this month, to 1.7% and 1.5% respectively over the next 12 months.
The most optimistic provinces
Optimism levels vary across provinces:
- Nova Scotia – 66.8
- Quebec - 65.3
- Ontario - 59.5 (the greatest drop this month at 4.9 index points)
- Saskatchewan – 50.8 (down 4.4 points)
- Prince Edward Island - 59.7
- New Brunswick - 56.6
- British Columbia - 55.9
- Alberta - 42.1
- Newfoundland & Labrador - 48.7
- Manitoba - 51.4
Businesses in natural resources experienced a sharp drop in confidence, falling 5.8 index points to only 38.8, the lowest of any sector. Businesses in the agriculture sector also posted low optimism levels (49.0), which is expected for this time of year.
Wholesale gained 4.2 points to 61.0, rising to the highest industry confidence level. Professional services (60.6), financial services (60.2), health services (60.2) and information (60.0) followed closely.
