Four out of five small business owners say businesses in good shape: CFIB

Feb. 9, 2015, Toronto – Feb. 9, 2015, Toronto – Small business confidence seemed to bounce back
in January, with four out of five owners saying their businesses were in
good shape, but
national gains were based on increases in only three provinces,
according to the Canadian Federation of Independent Business.

Feb. 9, 2015, Toronto – Small business confidence seemed to bounce back in January, with four out of five owners saying their businesses were in good shape, but
national gains were based on increases in only three provinces,
according to the Canadian Federation of Independent Business.

January’s Business Barometer reading rose about a point and a half to 63.5, after bottoming out in December.

“The
positive national news needs to be tempered by the fact that small
business confidence in seven provinces continued to decline,” said Ted
Mallett, CFIB’s chief economist and vice-president, in a news release. “We may be starting
to see the positive impact of lower oil prices, particularly in Ontario,
but it’s clear that small business owners in places like Alberta are
more than a little concerned about what the future holds.”

Measured
on a scale of 0 to 100, an index level above 50 means owners expecting
their businesses’ performance to be stronger in the next year outnumber
those expecting weaker performance. According to past results, index
levels normally range between 65 and 70 when the economy is growing at
its potential.

Optimism gains in Prince Edward Island (69.8),
Ontario (67.8) and Nova Scotia (64.9) accounted for the national surge.
The Alberta index, meanwhile, plunged more than 11 points to 54.8.
Newfoundland and Labrador (60.3), Manitoba (57.1) and Quebec (56.3) also
suffered moderate losses of between two and four points, while small
business confidence in Saskatchewan (55.1), New Brunswick (64.1) and
nation-leading British Columbia (71.7) declined slightly.

A clear
interruption in capital investment plans was a deeply concerning
development in January. There were signs of improved segment spending on
vehicles and production equipment, but only 55 per cent of business
owners were planning to make any capital expenditures in the next 12
months–a post-recession low. Concerns about customer demand and working
capital also spiked.

On the positive side, an overwhelming
majority (four to one) of small business owners continued to say that
their businesses were in good shape, and spring hiring plans showed the
expected seasonal bump, though it was not quite as large as what we had
seen the past two Januarys.

“This is a story that is continuing to
play itself out,” Mallett said. “It’s obviously a story about oil
prices, but it’s much too soon to tell just how deeply the negative
impacts will be in and around the oil sector, or how much of that
negativity will be offset by oil price-related improvements in other
parts of the country. The next few months will be very interesting.”

January
2015 findings are based on 1,094 responses, collected from a stratified
random sample of CFIB members, to a controlled-access web survey. Data
reflect responses received through Jan. 19. Findings are considered
accurate to +/- 3.0 per cent 19 times in 20.