Small business optimism up slightly in October: CFIB

Small business owners’ outlook improved in October after declining for four straight months thanks to improved sentiment in the agriculture, resources and retails sectors, according to the monthly index from the Canadian Federation of Independent Business (CFIB).

The organization’s Business Barometer is based on a national survey of 727 small business owners. The index moved up 0.3 points in October, to 57.2 (out of 100).

However, CFIB chief economist Ted Mallett said wage costs, taxes and regulations remain top concerns for business owners. The index was at a cyclical high of 66.0 in May.

Last week the federal government scaled back its plans for tax reforms that had received pushback from many small business owners, and announced that it would reduce the small business tax rate to 9% over the next two years.

Read: Tax proposal summary: What’s in. what’s out

Read: Liberals to cut small business tax rate to 9% over 2 years

The CFIB survey (collected from a stratified random sample and statistically accurate to +/- 3.6%, 19 times in 20) reflects responses received through Oct. 16, the day the Liberals announced their plans to reduce the small business tax.

Small business optimism ebbed in Newfoundland and Labrador (to 48.3), P.E.I. (53.6), Nova Scotia (62.5), New Brunswick (56.3), Manitoba (55.5) and Alberta (55.2). It also cooled in Quebec, though confidence remains highest there at 67.6.

Ontario (55.5), Saskatchewan (52.7) and B.C. (61.9) saw improvements in business optimism this month.

“The end result remains a pretty sour picture across the country, with most provincial indexes clustered around the 55 mark,” Mallett said in a release.

He pointed to declines in full-time hiring plans and only half of business owners expecting to make capital investments in the next few months.

On a scale between 0 and 100, an index above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance. An index level of between 65 and 70 indicates an economy growing at its potential, the CFIB says.

Read the full Business Barometer here.

Read: Tax proposals to have harmful effects on small biz: CFIB

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