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(November 19, 2008) Don’t look for small businesses to offer up any optimistic economic projections for 2009 — a new Canadian Federation of Independent Business (CFIB) study reveals that most business owners are feeling down.

CFIB spent six weeks talking to small businesses across the country and found that its Business Barometer Index dropped from 101.8 points in September of this year to 90.3 points during the weeks of October 6 and November 16.

Ontario business owners felt the worst, with their levels falling from 107 during September 2007 to 87.3 during October and November of this year.

“The lower readings in Ontario have been showing up for more than a year,” said Ted Mallett, CFIB’s chief economist, adding that the high degree of economic uncertainty makes it difficult to determine whether a low has been reached.

“The decline in optimism has been widespread,” said Mallett, “as no province or industry sector has been untouched. Nevertheless, the severity of economic injury has not yet matched that experienced in past downturns of the mid-1990s.”

British Columbia and Alberta also showed low levels of optimism, with their numbers falling to 89.3 and 91.8 respectively, from levels higher than 110 in September of last year.

Small businesses in Saskatchewan and Newfoundland and Labrador are the most optimistic, with levels at 102.6 and 99.3 respectively.

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CEOs take negative view on economy: PwC

(November 19, 2008) PricewaterhouseCoopers’s (PwC) quarterly Private Company Trendsetter Barometer shows that only 17% of those surveyed have a positive outlook on the U.S. economy over the next 12 months. That’s a drop of 24% from last quarter and the lowest rating in 16 years.

On the flipside, 41% of CEOs are pessimistic about the economy — up 5% from Q2 and 15% from this time last year.

The report also revealed that only 19% of CEOs said they were optimistic about the global economy over the next 12 months, which is down 20% from last quarter and 36% lower year-over-year.

It wasn’t all bad news, though. PwC found that, for the first time this year, the surveyed CEOs said that new bank loans increased, from 9% in Q3 to 14% this quarter.

“Financial activity across the board increased in the third quarter of 2008, as cash flow is becoming an increasing concern for a number of private companies,” says Ken Esch, a partner with PricewaterhouseCoopers’ Private Company Services Practice. “As the economy slows down and customers begin to delay payments, many companies will turn to new bank loans to stabilize cash levels and subsidize slow payments.”

However, gross margins stayed tight this quarter — only 3% of those surveyed reported lower margins.

Capital investments were also flat, though the average investment dropped to 8.2%, down from 10.6% last quarter and 11.6% in Q3 2007.

(11/19/08)