CFIB’s Business Barometer® long-term index, which is based on 12-month forward expectations for business performance, remained unchanged in June at 56.3. The short-term optimism index, based on a 3-month outlook, dropped less than 1 point and sits at 51.6.
Most provinces saw small improvements in long-term confidence or remained unchanged. Ontario’s drop of optimism of almost two points comes on the heels of a significant gain in the previous month, hence Canada’s largest province maintained a healthy confidence level at 56.0. The spread in long-term optimism among provinces narrowed gradually and currently ranges from 49.1 in New Brunswick to 56.8 in Prince Edwards Island.
Most sectors saw small improvements in long-term optimism in June. The largest gain in confidence was registered by firms in the hospitality sector (+4.1 points). The top three most optimistic sectors are still information, arts and recreation (62.9); financing, insurance and real estate (62.5); and professional services (59.0).
The average price increase indicator fell to 2.5, which is similar to the level registered back in April 2021. The average wage increase plans for the next 12 months also dropped to 2.5 in June, and it has hoovered around this level since August 2023.
Staffing plans are muted for both full time and part time hiring. However, labour shortages remain a major constraint but less acute than in the past year, with the main issue being a skills shortage.
The main constraints on business growth are the costs of doing business. Insurance and wage costs remain at elevated levels, close to their peaks registered in the previous months. Occupancy costs, and borrowing costs affect twice as many firms currently than before the pandemic.
These results are based on 662 responses received from June 4 to 14 from a stratified random sample of CFIB members to a controlled-access web survey. Findings are statistically accurate to +/- 3.8 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. An index level near 65 normally indicates that the economy is growing at its potential.
The next Business Barometer will be released on July 25, 2024.
For regional information about business optimism, price plans, limitations and main cost constraints for SMEs, please visit: the Business Barometer, Retrospective.
Andreea Bourgeois, Director of Economics
Simon Gaudreault, Vice-President, Research and Chief Economist