Posthaste: Canada’s small businesses haven’t been this nervous about their growth prospects since the resource crunch of 2016
Canada’s small businesses are less confident about their business prospects over the next year as the economy hits the brakes. Small business confidence dropped 3.7 index points to 56.1, with the Prairies seeing the biggest declines, according to the Canadian Federation of Independent Business (CFIB)’s latest business barometer.
The report comes as Statistics Canada reveals third-quarter GDP this morning. BMO Capital Markets expects GDP to downshift to a 1.4 per cent annualized rate in the quarter, from 3.7 per cent in Q2.
“On the whole, business owners are not feeling optimistic about their prospects for the next 12 months, especially in the Prairies,” said Ted Mallett, CFIB’s vice-president and chief economist. “The results we’re seeing harken back to the resource crunch of 2016. We can expect weaker hiring intentions in the short-term as a result.”
The number of owners who said their businesses were in bad shape jumped to 18 per cent, while 41 per cent that their business affairs were in good shape. Respondents cited insufficient domestic demand as the major limitation on sales growth, apart from a shortage of skilled labour. Muted energy prices and regulations were also seen as major cost constraints.
“Hiring plans are typically weak this time of the year, but this month they fell to a net negative, with 15 per cent of owners planning to add full-time staff in the next three months compared to 17 per cent who plan to cut back,” the report noted.
Albertan businesses were the least confident about their prospects, with Quebecers most confident, the CFIB survey said.
Sectorally, transportation, agriculture and wholesale were the least confident sectors this month, while the natural resources sector also lost its nerve.
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— Please send your news, comments and stories to [email protected]. — Yadullah Hussain @yad_Fpenergy
With files from The Canadian Press, Thomson Reuters and Bloomberg