Rough year in small business confidence ends on lowest note
Toronto, December 31, 2015 – Canada’s small business confidence dropped to 55.7 in December, its weakest month in its weakest year since the 2008-09 financial crisis.
“The year is ending with more of a thud than with a whimper as Alberta’s ongoing struggles continue to be felt throughout the country,” said Ted Mallett, Canadian Federation of Independent Business (CFIB) chief economist. “Industry confidence remains weak across most sectors and opinions on the general state of business’ health have moved towards the negative.”
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.
Optimism dropped a point to 65.9 in British Columbia. Alberta set an all-time record low for the second time in four months, plummeting to 33.1, and remains by far the weakest in the country and the only province below the national average. Saskatchewan rose to 56.3, while Manitoba fell two points to 66.4. Ontario dropped to 59.9, just edging out Quebec, which saw a three point climb to 59.6. Newfoundland and Labrador’s business confidence bounced back from last month, climbing to 64.8. Nova Scotia picked up four points to reach 71.0, the highest mark in the country. New Brunswick’s confidence made a small jump to 61.8. Prince Edward Island fell two points to 61.1.
The natural resources sector remains the weakest, followed by agriculture, manufacturing and construction. There are no offsetting signs of strength among other industries, with none scoring higher than a sluggish 61.0.
Short-term employment plans are weak compared to Decembers in 2014 and 2013, with 15 per cent of business owners expecting to cut staff levels in the next few months versus 19 per cent who are expecting to add.
December, 2015 findings are based on 759 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through December 14. Findings are considered accurate to +\- 3.6 per cent 19 times in 20.