Jan. 31, 2014, Toronto — Although small business optimism rebounded in January, it's not quite back at the levels seen through much of last year, according to the Canadian Federation of Independent Business (CFIB).
The CFIB's Business Barometer index rose to 64 (up 1.7 points), clawing back about half of the losses experienced in December 2013.
“The gain in this month’s barometer is really fueled by Ontario, which is reporting optimism levels above the national average,” said Ted Mallett, CFIB’s vice-president and chief economist. “When the Business Barometer is anywhere between 65 and 70, that means the economy’s growing at its potential. This month, it looks like we’re getting closer.”
The national landscape shows a mixed picture from east to west. Newfoundland and Labrador held steady at 68.1, giving it the second highest reading. Prince Edward Island experienced a small improvement to 58.8, the best reading it has had since mid-2012. Little change was seen in Nova Scotia (58.1) and New Brunswick (56.6).
In Quebec, there was a slight recovery to 56.2 (up 2.4 points). Despite these gains, however, business sentiment in Quebec still remains the weakest in the country.
Ontario’s index is what drove up the national average, rising to 65.4 from 62.9.
Looking west, losses were experienced by Manitoba (62.6), Saskatchewan (63.7) and Alberta (67.1). British Columbia held strong at 71.8, posting the highest index in the country and among the best readings over the past two and a half years.
“Over the next few months, one in four businesses plans to hire more full-time staff,” said Mallett. “This is compared to the eight per cent who plan to cut back. Looking at the bigger picture, 44 per cent of owners feel their business is ‘good,’ while only eight per cent say it’s ‘bad.’ I think this makes it one of the more positive readings we’ve had lately.”
The Business Barometer is measured on a scale of 0 and 100. An index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance.
Index levels normally range between 65 and 70 when the economy is growing at its potential.
The January 2014 findings are based on 1,178 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 2.9 per cent 19 times in 20.
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