Canadian SMB Confidence At Record Lows

The Canadian Federation of Independent Business (CFIB)’s latest Business Barometer indicated that small business confidence dropped to a new historic low with the impacts of the coronavirus pandemic. The national confidence level dropped an additional 19 index points from last month’s following a 10-point decline earlier in March, according to an announcement.

Twenty percent of owners indicated their company is a good state, while 38 percent said their business is faring poorly. Hiring plans have stopped and only 5 percent of business owners plan to bring on full-time staff in the three months to come. Half are looking to have layoffs.

“March 2020 has turned out to be a month like no other in Canada’s economic history,” CFIB Vice President and Chief Economist Ted Mallett said in the announcement. “Small business sentiment has never been this low in the Business Barometer’s 32-year history, including during the 2008 and 1990 recessions.”

All verticals had a decline of optimism and dropped to levels in the range of 21 to 36 index points. The recreation and information space were the least optimistic, coming in at 21.6 index points. It was followed by manufacturing at 24.7 as well as financial services at 27.1. While they are still significantly under the norm, personal services, hospitality and retail registered the highest confidence levels among small and medium-sized businesses (SMBs).

Quebec experienced the highest decline in optimism in March, dropping 44.5 index points to 15.7. According to the announcement, “It is possibly due to the province taking quicker and more drastic measures than other provinces to halt the COVID-19 outbreak.” Alberta as well as Newfoundland and Labrador had the second and third lowest results. British Columbia and Saskatchewan, on the other hand, registered levels near the national average following declines of 16 points.

Manitoba and Ontario had slightly more positive results. New Brunswick and Nova Scotia both encountered strong declines in confidence but stayed more positive than the rest of the country.