Monthly Business Barometer®

December 2024 Results

Small business optimism in Canada

CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, dropped about three points to 56.4. The short-term optimism index, based on a 3-month outlook, also decreased five points to 46.6. The combined challenges of U.S. tariff threats, uncertainty stemming from the recently announced and temporary GST holiday, and the Canada Post strike have created a "perfect storm," reversing the upward trend in business optimism observed in recent months.     

The current state of business health deteriorated slightly in December.  

Provincial picture

Most provinces are adopting a cautious "wait-and-see" approach, resulting in modest declines in confidence for New Brunswick, Manitoba, and Saskatchewan. Optimism in other provinces remains nearly stagnant..

Sectoral overview

The sectoral outlook presents a mixed picture. The three most optimistic sectors—information, arts and recreation; financial services; and professional services—continue to maintain their leading positions. Encouragingly, manufacturing and construction sectors report optimism indexes above 60. However, these gains could be temporary if U.S. tariffs take effect in 2025, posing significant risks to sustained growth.

Inflation indicators

The average price increase indicator showed little change, settling at 2.6%, while the average wage increase dipped slightly to 2.2%. For more information on price and wage plans, the distribution of the average increase and comparison with past periods, click here. 
    

Other indicators

Full-time staffing plans remain subdued, with businesses nearly evenly split between hiring (15%) and laying off (17%).   

Key cost constraints hindering business growth include tax and regulatory expenses (68%), wage costs (65%), and insurance costs (65%). Meanwhile, insufficient demand persists as the primary barrier to business and production expansion. 

The supply chain registered some challenges this month. Inventories saw a notable decline (-7 points), while unfilled orders increased slightly (+2 points). Additionally, more businesses reported distribution constraints, rising by 5 points this month.

Methodology

These results are based on 631 responses received from December 3 to 9 from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 3.9 per cent 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. Provincial results are based on 3-months moving averages, except for PEI and NL which are based on 12-months moving averages. Sectoral results, except retail, are based on 3-months moving averages. Therefore the provincial and sectoral charts may not show the same movements as the aggregate Canada data. 

The next Business Barometer will be released on January 30, 2025.

For regional information about business optimism, price plans, limitations and main cost constraints for SMEs, please visit: the Business Barometer, Retrospective. This information will be updated on December 23, with the 2024 data. 

Andreea Bourgeois, Director of Economics

Simon Gaudreault, Vice-President, Research and Chief Economist