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Small business optimism holds steady in October


October 31, 2013
By Canadian Garden Centre & Nursery

Oct. 31, 2013, Toronto — Small business optimism trended up ever-so-slightly in October, according to the Canadian Federation of Independent Business (CFIB).

The Business Barometer index rose by half a point, up to 65.0 from 64.5 in September.

“Although the index went up slightly in October, what we can take from the last four months is a general stabilizing trend,” said Ted Mallett, CFIB’s chief economist and vice-president. “In the coming months, it will be telling to see if business owners can build confidence levels further in light of reasonably stable price and interest rate environments and improving prospects for the US economy.”

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Small business optimism in Newfoundland and Labrador rose four points to 76.4, tops in the country. These levels are difficult to sustain, and a correction could be coming.

Also up in October was British Columbia, which at 70.7 is number two in Canada, along with Ontario, Manitoba and New Brunswick (66.6, 62.4, and 57.0 respectively).

Prince Edward Island’s small business optimism stabilized in October, but it remains by far the lowest reading of any of the provinces at 49.0.

Nova Scotia (60.1), Alberta (70.4) and Quebec (57.8) fell off slightly, although Alberta remains near the top of the rankings.

Saskatchewan, also near the top, held steady at 69.4.

“The ideal results are stability with an upward trend, and that’s exactly what we are seeing over the past quarter,” said Mallett. “After a rough spring, small business optimism has levelled off somewhat, and that stability is reflected in all of the indicators. Full-time hiring plans are steady, orders and accounts receivables show gradual improvements, and pricing and wage expectations have also increased of late.”

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

The October 2013 findings are based on 1,009 responses, collected from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 3.1 per cent 19 times in 20.


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