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Small business confidence sinks in June


July 5, 2012
By The Canadian Press

July 5, 2012, 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.

July 5, 2012, 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.

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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 an online
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 with 21 per cent who said the
same in May. Twelve per cent said they will cut back, vs. 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.”


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