Monthly Business Barometer®

January 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, dropped again several points on monthly basis to settle at 54.6. The short-term optimism index, based on a 3-month outlook, gained modestly and sits at 49.2. The U.S. tariff threats essentially reversed the upwards pattern seen until November and triggered a 5-point decrease in long-term optimism since.     

Confidence among exporting small businesses fell significantly since this November (-8.1 points). Optimism among importing SMEs also dropped several points (-3.3 points). 

The current state of business health improved marginally in January.   

Provincial picture

Most provinces are on alert and sticking to their "wait-and-see" approach, resulting in small changes to confidence either downwards or upwards. The largest declines were registered in British Columbia (-4.5 points), Ontario (-1.8 points), and New Brunswick (-1.4 points). Small gains in optimism were seen in Manitoba and Saskatchewan (+1.9 points each), while the rest of the provinces remained nearly stagnant.

Sectoral overview

The sectoral outlook is more consistent. The majority of sectors are registering declines in optimism. The only sectors bucking this trend are retail (+6.9 points), health and education (+5.2 points), transportation (+4.2 points), and hospitality (+1.5 points). Nonetheless, these gains only brought the sectors close or just-above their historical averages, showing that they are not indicators of sustained growth.

Inflation indicators

These indicators show little to no change to start 2025. The average price increase indicator remained constant at 2.6%, while the average wage increase gained slightly to 2.4%. 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 muted with no real appetite for hiring.   

Key cost constraints hindering business growth include tax and regulatory expenses (70%), insurance costs (68%) and wage costs (65%). Insufficient demand persists as the primary barrier to business and production expansion (as reported by 52% of SMEs).

Methodology

These results are based on 1037 responses received from January 7 to 14 from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 3.0 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 February 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