Small business confidence falls in March

Optimism among small business owners dropped in March, causing the Canadian Federation of Independent Business’s (CFIB) Business Barometer index to fall three points.

The index fell to 55.9, which is “one of the worst readings we’ve seen in the past three years,” CFIB vice-president and chief economist Ted Mallett said in a Thursday press release. An index level of about 65 suggests a healthy economy.

Only about 17% of business owners plan to hire full-time staff, and 15% plan to cut back. Plans to increase wages and prices also dropped in March, the CFIB said.

“It’s not typical for hiring intentions to be so low at this time of year, as businesses should be gearing up for the busier spring and summer seasons,” Mallet said in a statement. “But it’s indicative of the low level of optimism that private-sector firms are reporting.”

The generally low level of business confidence echoes fears in other parts of the economy, the CFIB said, like lagging consumer demand, rising inventories, trade pressures and an expected slowdown south of the border.

Of small business owners, 43% said their business is in “good shape,” but 14% said they’re navigating troubled waters.

Nova Scotia and Quebec posted high levels of confidence this month (66.8 and 65.3, respectively) but Ontario and Saskatchewan dropped significantly month-over-month, to 59.5 and 50.8, respectively. Alberta remained the least optimistic province with a reading of 42.1.

Natural resource companies dropped in confidence, falling 5.8 points from February to 38.8, the lowest of any sector. The wholesale industry had the most confidence, at a level of 61.0.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.