Business confidence down across the country for second straight month

by MorinvilleNews.com Staff

Looking forward to the next 12 months is not a picture of confidence for Canadian businesses, according to a new member survey from the Canadian Federation of Independent Business. Confidence dropped 5.4 points to 47.5, the second indicator drop in as many months.

Ontario and Saskatchewan remained the same as March at 49.2 and 47.6, respectively; however, Alberta saw a slight increase of 2.4% to 48.8. Most provinces lost ground or remained constant.

“Small business owners are trying to get back on their feet, but they keep getting knocked down to the ground. The April 1 carbon tax increase, minimum wage hikes in certain provinces, and persistent lack of demand have all negatively impacted their confidence levels for the coming year,” said Andreea Bourgeois, CFIB’s director of economics.

CFIB says the lack of confidence may lead to some businesses being timid in their typical seasonal hiring intentions. While 16 percent indicate they are looking to hire, 11 percent intend to do layoffs. Some plan to raise prices.

“The 0.5% month-over-month growth in the planned average price increase for the next 12 months is concerning. While one month doesn’t set a trend, it shows us the negative headspace many business owners are in right now. With recent payroll increases and high wage costs affecting—yet again—a record share (68%) of businesses, it makes sense that they are less likely to hire and expect to raise prices,” Bourgeois added. “The recent carbon tax hike may also force some firms to pass the additional costs onto consumers.”

CFIB says the lack of demand has steadily increased since Quarter 2 of last year and is still the top factor limiting business growth and sales for more than half (52%) of small firms in April. Additionally, high insurance costs are also causing challenges for 72% of businesses.

“The situation is not looking good for many SMEs this month,” Bourgeois said. “While the Bank of Canada’s restrictive policy helps cool inflation, it’s negatively impacting businesses’ ability to operate and compete.”