Small businesses more optimistic in April, CFIB survey says
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The small uptick is a sign that government intervention has had some effect during the COVID-19 pandemic, the Canadian Federation of Independent Business says, but it doesn't signal a return to business as usual.
Small business confidence edged up at the start of April after its historic descent in March, gaining just under 7 index points to 37.7 on the Canadian Federation of Independent Business (CFIB)’s Business Barometer.
“The small bounce back in business confidence we’ve seen since the beginning of the month is a sign that the raft of unprecedented government intervention has had some effect, but we’re nowhere near a return to business as usual,” said Ted Mallett, CFIB’s vice-president and chief economist. “In fact, even more business owners are planning to lay off staff in the next three months than when we surveyed them two weeks ago.”
Only five per cent foresee adding on full-time staff in the next three months, while 63 per cent say they will have to cut back. Less than one-tenth of business owners say their business is in a good state, compared to 58 per cent who say it is in a bad state. Wage and price plans and capital spending have all seen dramatic drops as well.
An index level nearer to 65 indicates that the economy is growing at its potential.
Provincially, Quebec remained the least optimistic province, though it gained 8.7 index points to 24.4. Newfoundland and Labrador (36.1), Alberta (36.8) and British Columbia (37.8) all posted results close to the national average. New Brunswick (47.3) and Manitoba (46.2) were the most optimistic provinces. Ontario (41.0), Saskatchewan (42.6), Prince Edward Island (45.5) and Nova Scotia (45.9) all posted middle-of-the-pack results in the low- to mid-40s.
On an industry-by-industry bases, agriculture dropped to the lowest optimism level of any sector at 23.9, followed by manufacturing (32.6), natural resources (33.3) and hospitality (33.8). The transportation sector was the most optimistic at 56.6. Personal services (47.6) and information, arts and recreation (44.7) were also less pessimistic. All other sectors posted results in the mid-30s range.
Early April 2020 findings are based on 1,602 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Due to rapidly evolving economic conditions impacted by the global COVID-19 pandemic, CFIB will increase the frequency of its Business Barometer Survey from monthly to bi-monthly through June 2020. CFIB will release results for mid-April on April 30.