Toronto, September 26, 2024 – The shares of small businesses reporting their growth is limited by skilled (40%) or un/semi-skilled (16%) labour shortages reached a low point in over two years, while only 12% of firms are planning to hire in the short term, finds the September 2024 Canadian Federation of Independent Business (CFIB) Monthly Business Barometer®. This fresh data from the small and medium-sized (SME) sector (representing more than 99% of employers and 38% of the workforce in the private sector) indicates that the rapidly cooling labour market has continued to lose strength this month.
Small firms plan to raise wages and prices by an average of 2.3% in both cases, also a low point in over two years.
“Labour market indicators clearly show employers are on the brakes. At the same time, price and wage plans are on par and overall are trending downwards, which is good news,” said Simon Gaudreault, Chief Economist and Vice-President of Research at CFIB.
Meanwhile, the share of businesses indicating that insufficient demand is limiting their growth is at 53% this month and a full 9 points over its historical average.
The shares of small businesses struggling with numerous cost constraints, such as insurance (68%), taxes (67%), and wages (67%), remain elevated. These indicators have been above their historical averages for at least over a year.
“As businesses are dealing with reduced demand, lower revenues and higher costs, they’re less likely to hire. Instead, they’re hanging on to their existing employees. A lot of SME employers are currently looking for clearer signs of economic improvement before they can make growth-fueling decisions again,” said Andreea Bourgeois, Director of Economics at CFIB.
The long-term small business confidence index shaved off 2 index points, reaching 55.0 in September and has now been below its historical average (60) for 27 months in a row.
“The small business optimism index has slightly dropped this month, a disappointing result that is further extending the stretch of subpar confidence displayed by Canadian entrepreneurs. There’s ample room for improvement in the coming months, with a monetary policy that is likely to remain overly restrictive for a while (no matter how fast the Bank of Canada cuts interest rates) and with high costs that continue to exert pressure on small businesses. Our data support a continuation, in fact likely an acceleration, of interest cuts by the Bank of Canada,” Gaudreault concluded.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
Public.affairs@cfib.ca
Methodology
September Business Barometer®: September findings are based on 630 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflects responses received from September 3-16, 2024. Findings are statistically accurate to +/-3.9 %, 19 times in 20. Every new month, the entire series of indicators is recalculated for the previous month to include all survey responses received in that previous month. Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger over the next three or 12 months outnumber those expecting weaker performance.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.