Canadian Small Business Confidence Continues to Fall: Survey

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dated: 2022-11-24 18:48:27 .

Small business confidence in Canada continues to decline, according to new survey data from the Canadian Federation of Independent Business (CFIB). (Getty Images)

Small business confidence in Canada continues to slide as companies struggle with rising costs and labor shortages, according to new survey data from the Canadian Federation of Independent Business (CFIB).

The CFIB says its latest business barometer found that more companies are taking a less optimistic approach to the holidays. The 12-month optimism index fell to 50, a level not seen since the pandemic-induced economic slowdown of 2020. Barring the decline in 2020, the decline in November was the lowest since 2009. The CFIB says a normal index reading near 65 suggests the economy is operating at full potential .

“The situation remains sobering for many small businesses,” Simon Gaudreault, CFIB’s chief economist and vice president for research, said in a statement.

“High costs of doing business, shortage of staff and constant increases in interest rates make it difficult for them to know for sure where their business is going.”

The CFIB survey found that rising borrowing costs are a concern of 35 percent of business owners, down from 17 percent last year. The Bank of Canada is in one of the most aggressive tightening cycles in its history as it tries to fight rising inflation, and has made six consecutive interest rate hikes since March, bringing the benchmark rate to 3.75 percent.

The survey also found that 71 percent of businesses say the main factor limiting business growth is fuel and energy costs, followed by a lack of skilled (53 percent) and “skilled/unskilled” labor (38 percent).

The results come ahead of the holiday season, a crucial period for many small businesses, particularly in retail. While the retail sector typically sees a surge in optimism during the holiday season, the outlook for retail businesses remains poor, falling to its third lowest level in 12 months.

An Equifax Canada survey released last week found that 60 per cent of Canadians say they will spend less on gifts this holiday season due to inflation. Equifax Canada also found that only one in four (25 per cent) small business owners said they were more confident about the 2022 holiday season than they were in 2021, down from last year when 36 per cent felt more confident .

“For many, the usual boost they expect from holiday sales doesn’t look as promising this year,” CFIB economics director Andreea Bourgeois said in a statement.

“With big shopping events coming up this weekend – Black Friday, Small Business Saturday and Cyber ​​Monday – this is another reminder to support local businesses.”

CFIB’s monthly Business Barometer survey for November was based on 719 online responses from corporate group members with a margin of error of +/- 3.7 percent, 19 of 20.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

Download the Yahoo Finance app, available for Apple and android.

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Canadian Small Business Confidence Continues to Fall: Survey

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Source https://canadatoday.news/ca/canadian-small-business-confidence-continues-to-fall-survey-161151/

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