Monthly Business Barometer®

February 2025 Results

Small business optimism in Canada

CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, continued to decline, reaching 49.5—about 10 points below the historical average. The short-term optimism index, based on a 3-month outlook, edged down by 2 points to 46.8—diverging further from its historical average of 54.0.    

The U.S. tariff threats disrupted the upward trend seen until November, and despite implementation delay, rising uncertainty contributed to the steep drop in long-term optimism.

Optimism among importing SMEs dropped slightly since September (-5.6 points). In comparison, confidence among exporting small businesses fell significantly (-23.3 points).

Provincial picture

Almost all provinces have seen large drops in confidence. The largest declines in the long-term index were recorded in British Columbia (-3.7 points), Alberta (-3.6 points), and Manitoba (-3.4 points).

Sectoral overview

The sectoral outlook is more varied. Only a few sectors are experiencing a slight increase in optimism, such as health and education (+3.9 points), information, arts and recreation (+0.5 points) and construction (+1.1 points). The monthly declines were substantial in most other sectors, particularly in manufacturing (-7.8 points), retail (-7.4 points), wholesale (-6.8 points), and transportation (-6.8 points).

Inflation indicators

The average price increase indicator rose to 3.1%, marking the highest level since April 2024. The average wage increase planned for the next 12 months decreased slightly to 2.2%. 
    

Other indicators

Full-time staffing plans remain virtually unchanged in February, but they are slightly below normal for this time of the year.  

Similarly to January, key cost constraints hindering business growth include tax and regulatory expenses (67%), insurance costs (67%) and wage costs (61%). Insufficient demand remains the primary barrier to business and production expansion (as reported by 54% of SMEs).

Methodology

These results are based on 526 responses received from February 4 to 12 from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 4.3 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 March 27, 2025.

For regional information about business optimism, price plans, limitations and main cost constraints for SMEs, please visit: the Business Barometer, 2024 Retrospective. 

Andreea Bourgeois, Director of Economics

Simon Gaudreault, Vice-President, Research and Chief Economist

Laure-Anna Bomal, Economist