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Small biz optimism dips in December


January 6, 2014
By Canadian Garden Centre & Nursery

Jan. 6, 2014, Toronto — After a relatively strong past few months, small business optimism ended the year on a bit of a low, dropping by more than three and a half points in December 2013.

The Canadian Federation of Independent Business' (CFIB) Business Barometer index dropped to 62.3 last month – it's lowest level since June 2013 .

“This
month, seven out of 10 provinces saw a drop in optimism,” said Ted
Mallett, CFIB’s vice-president and chief economist. “We’ve had some
pretty smooth sailing over the past couple of quarters, but as we end
2013, we’re looking at a slightly different story.”

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A look from coast-to-coast in December showed just how much the profile of optimism changed among small business owners.

Entrepreneurs
in all provinces except for British Columbia (72.6), Prince Edward
Island (58.3) and New Brunswick (56.7) expressed less optimism than in
November 2013. The biggest declines were experienced by Quebec (53.8) –
which represented Canada’s weakest reading – and Ontario (65.8), both
which were largely responsible for driving down the national average.

Newfoundland
and Labrador experienced a sharp correction to 68.1, while declines in
optimism were also experienced by businesses in Alberta (70.6),
Saskatchewan (68.4) and Manitoba (62.3). 

By sector, retail
suffered the biggest drop in optimism. Its index fell almost seven
points to 60.0. Similar declines were seen in the construction and
manufacturing sectors.

“Historically, it has not been unusual
for retail to see large shifts leading up to the holiday shopping
season, which really can make or break the year for some businesses in
that sector,” said Mallett. “There’s no question that retailers were
more than a little nervous about the consumer mood this year, and that
is reflected in the unusually low score.”  

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.

Based on past results, index levels normally range between 65 and 70 when the economy is growing at its potential.

The
December 2013 findings are based on 1,108 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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