The Canadian Federation of Independent Business (CFIB) released its May 2022 business barometer readings showing 12-month sentiment scores dropped by three index points while the shorter term, three-month optimism index fell two points when compared to April 2022 figures.
The CFIB says despite the drop in small business sentiment, 43 per cent of businesses report being in a good state. Just 16 per cent said they were ins bad shape. Labour shortages were cited as the biggest factor limiting business growth in May, while fuel and energy prices continued to be the biggest cost constraint reported by 76 per cent of surveyed businesses. Of those surveyed, 30 per cent say they are planning to hire in the next three months while the number of businesses saying they will cut back has remained at 11 per cent, the same number reported in April 2022.
The findings are based on 708 responses from a random sampling of CFIB members. The CFIB Business Barometer Short-term Index is based on three-month forward expectations for business performance. This number dropped to 58.8, a monthly decline of almost two points. The long-term optimism index, based on a 12-month outlook, fell more than three points to 61.6. the CFIB says an index above 50 means business 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,” they write.
Long-term expectations were weaker for most sectors. In financial and insurance, the short-term sentiment index dropped 1.2 per cent, month-over-month, to 54.2 while the long-term index dropped to 60, a 2.7 per cent month-over-month decline.
