West leads upsurge in Canadian business confidence
Alberta and Saskatchewan lead the nation
According to past results, index levels normally range between 65 and 75 when the economy is growing.
According to the latest survey data from the Canadian Federation of Independent Business (CFIB), small business confidence climbed to 65.0 in December, almost a point and a half above its November level.
“The Business Barometer index has historically hovered between 65 and 70 when the economy is expanding,” commented Ted Mallett, vice-president and chief economist for CFIB. Adding, “The return to ‘near normal’ is seen as good news for Canada’s economic performance, which had lately been constrained by uncertainties in foreign markets.”
Provincially speaking the East-West divide is clearly apparent.
Business owners in Alberta (73.6) and Saskatchewan (72.2) are the most optimistic in the country, while BC is stable at 68.0. Optimism in Central Canada is very close to the national average, with Quebec businesses at 65.3, Manitoba firms at 64.8, and Ontario businesses slightly behind at 63.5.
Confidence in Atlantic Canada, however, continues to lag. Newfoundland and Labrador, Prince Edward Island and New Brunswick are at an identical 59.8. While Nova Scotia remains the country’s least optimistic province at an index level of 55.6.
The services sector is the most optimistic, led by the arts, information and recreation industry (72.0). The wholesale goods sector is also performing reasonably well, just shy of the 68 mark.
“Although less robust, business confidence in the construction and manufacturing sectors turned upward in December to 60.6 and 63.6 respectively. Consumers, however, appeared to become more cautious in the month, sending the retail and hospitality sector indices down below 60,” said Mallett.
At the same time, shortages of working capital appear to be slightly less of a concern to business owners in recent months.
“However, after increasing through the past few years, concerns about shortages of qualified labour have fallen back of late,” concluded Mallett.
Measured on a scale between 0 and 100, an index level above 50 means owners expecting their businesses’ performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing.
The December 2011 findings are based on 900 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.3 per cent 19 times in 20.
Category: Business
About the Author (Author Profile)
Markham began his journalism career writing columns in the mid-1980s for Western People Magazine, then reported for a small Saskatchewan daily. He has spent most of his career in media and communications, likes to dabble in politics, was actively involved in economic development for many years, thinks that what goes on in the community is just as important as what happens provincially and nationally, and has a soft spot for small business (big business, not so much). Markham is a bit of a contrarian and usually has a unique take on the events of the day.
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