Small Business Confidence Declines in August

According to CFIB's Business Barometer® Index , small business confidence for August fell for the third consecutive month to 64.9 last month, down from 65.7 in July.  The 2010 peak was reached in March when the index was at 69.9.  An index result that exceeds 50 indicates that owners expect their business to grow in the following year.  The figure is significantly higher that it was at the end of 2008, when it was below 40.

BC saw the largest decline from July of 8% to 64.5, while confidence in Quebec and Ontario actually rose by 1.5% and 6% respectively. Manitoba small business owners, at an index level of 57.9, were the least optimistic about their potential growth.

Confidence within the agriculture and construction industries remained low at 53.7 & 59.0 respectively.  There was, however, a brightened outlook among those in professional services and health & education services , both of which were above 70.

The primary business constraint was insufficient domestic demand at 48%, while 32% were concerned about shortage of skilled labour.  Only 13% of respondents expected to increase hiring within the next 3-4 months.  Overall 44% thought that the overall business environment was satisfactory, while 37% thought it was good.

Growth in the Canadian economy slowed to an annualized 2% rate in the second quarter compared with 5.8% in the first quarter of the year.

"The August 2010 findings are based on 919 responses from of CFIB members, to a controlled-access web survey and are statistically accurate plus or minus 3.2 per cent 19 times in 20."