The level of optimism among small and medium-sized business (SME) owners continued to fall in October to a historic low since the start of the pandemic, in particular due to rising costs, according to the Canadian Federation of Independent Business (CFIB) Business Barometer.
“Small businesses still face many challenges, including the inability to repay their pandemic debts and a further hike in the Bank of Canada's key rate aimed at curbing inflation,” said Simon Gaudreault, Chief Economist and vice-president of research at the CFIB.
Mr. Gaudreault added that 34% of small business owners said their borrowing costs affect their business, up from 21% last January. Yet 38% of respondents felt their business was doing well, compared to 15% who said the opposite.
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Data released Thursday show that the short-term confidence index, or three months in Canada, fell 3 points to 46.4, while the long-term (12 months) index stood at 51.4. .
At the provincial level, in the short term, Saskatchewan, Newfoundland and Labrador and Alberta recorded the best gains in the confidence index. Conversely, Ontario is the province where the short-term confidence index fell the most (-5.9 points to reach 43.6), followed by Quebec (-2.4 points; 48.8 ).
“This is the 6th month in a row that we have seen a drop in confidence in Quebec and that is worrying. Government action is important to help SMEs reduce the barriers that are holding their growth back, including inflation and labor shortages,” said François Vincent, Vice-President for Quebec at CFIB.
The least optimistic sector is retail, while the arts, entertainment and information sector is the most optimistic sector in the country.
“Generally, for This time of year, the retail sector is expected to be very optimistic. […] This is a good reflection of the level of concern among small business owners about inflation and weak consumer spending expectations,” revealed Andreea Bourgeois, Director of Economics at CFIB.
< p>The Business Barometer was conducted among 752 CFIB members in an internet survey between October 6 and October 13, 2022.
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