CFIB: Business confidence takes upward jump in 3rd quarter, 2006

Bookmark and Share

September 27, 2006 – Toronto – Results of the latest quarterly survey of small- and medium-sized enterprises, by the Canadian Federation of Independent Business (CFIB) show that business confidence took a sizeable jump. The CFIB Quarterly Business Barometer Index stands at 108.6 (1988=100), almost a point and a half above where it stood in June.

�This puts us back in the high range of expectations measured in the past five years, which suggests good prospects for the economy for the rest of this year and into next,� said CFIB�s chief economist, Ted Mallett.

Overall, about 45 per cent of all business owners say their firms are doing much better or slightly better than one year ago, while only 22 per cent say they are doing somewhat or much worse. However, longer-term expectations are more positive, with 49 per cent of business owners expecting stronger performance during the next twelve months, and only 13 per cent expect a weaker year ahead.

Mallett said the data reveal some distinct differences when segmented into regions. �Carrying on a two-year trend, businesses in BC and Alberta lead their eastern counterparts in confidence by a sizeable margin. Confidence in both provinces, near their historical highs close to the 120 mark, are fully eight points or more higher than the next most positive province�Nova Scotia.�

He noted businesses in Ontario, Quebec, Saskatchewan and Newfoundland & Labrador, are keeping with the improving national average in the 105-to-108 range, while Business confidence in Manitoba, New Brunswick and PEI fell somewhat from mid-year.

On the employment front, Mallett said, the increase in overall confidence is matched by a corresponding increase in hiring expectations. About 32 per cent of business owners are expecting to increase full-time employment in the next 12 months � three percentage points higher than in June.

When asked about factors affecting their businesses, Mallett said that respondents reported improvements in several key areas. �Both energy prices and insurance premiums have come down in a way that has helped our members ramp up their capital investment plans,� said Mallett.

Mallett concluded by saying that with small business owners planning to maintain demand in the labour market, which supports the consumer sector, and the positive news they are reporting in terms of input costs, we expect to see a strong finish to 2006.

This survey was conducted among a stratified sample of CFIB members between September 5 and September 16, 2006, and drew 1,769 responses. The national results are accurate to within +/- 2.4 percentage points, 19 times out of 20.

About CFIB

CFIB works on behalf of more than 100,000 independent business owners in every sector and region in Canada. Taking our direction from CFIB Members, through regular surveys, we lobby for small- and medium-sized businesses at the federal, provincial and local levels of government. Visit www.cfib.ca