The Canadian Press
CFIB says its index dropped to lowest reading since July 2009
[TORONTO, ON] – Confidence among Canada's small- and medium-size businesses continued to decline in July, according to the Canadian Federation of Independent Business.
The CFIB says its index dropped from 62.1 in June to 60.9 last month, its lowest reading since July 2009.
CFIB's chief economist says the difference two years ago was that the index was trending in the opposite direction, toward greater confidence.
''The index's current position against GDP puts it very close to the zero-growth mark, suggesting Canada's economy is nearing a standstill,'' says Ted Mallett. ''Retailer optimism took a big tumble in July and has joined the hospitality and personal services sectors in the sub-60 club – suggesting that consumers are getting cautious with their spending.''
The index is on a scale of 0 to 100, with an index level above 50 meaning owners expect their businesses' performance to improve in the next year.
The CFIB says past results suggest index levels normally range between 65 and 70 when the economy is growing at its potential.
CFIB found business owners in Saskatchewan, which had an index level of 72, and Alberta, with an index of 70.3, seem to be the most optimistic.
It also found that Newfoundland and Labrador, with an index of 63.3, was the only province to see an increase from June levels.
Index levels in Nova Scotia and Prince Edward Island are the country's lowest at 54 and 52.7 respectively.
One piece of positive news in the latest survey is a rebound of hiring expectations, with 20 per cent of business owners surveyed planning to hire full-time staff in the next three or four months, up from 15 per cent in June.
The July 2012 findings are based on 839 responses from CFIB members in a web survey. The findings are considered accurate to within 3.4 percentage points 19 times in 20.