Business Confidence Up Says Business Group

Auto parts businesses are among those doing better this holiday season, reflecting an increase in confidence among small and medium-sized businesses in Canada late this year, the Canadian Federation of Independent Business said Wednesday.
In a survey conducted in late November and early December, about 42% of all business owners said their companies are doing much or slightly better than 12 months ago, while 23% said they were doing somewhat or much worse.
As a result, the CFIB Quarterly Business Barometer Index now stands at 108.4, above the September level of 107.5, though still below the 109.9 level of the same time last year. The base 100 figure is for the 1988 year.
“More businesses are doing well than in the previous 12-month business year,” said Ted Mallett, chief economist of the business lobby group. “The results show a healthy overall growth for the Canadian economy.”
This follows a previous gain in September, and recovers most of the ground lost in previous quarters this year.
For the next three months, 32% of owners say they expect much stronger and somewhat stronger performance; 47% expect things to remain the same; and 20% foresee weaker results.
Longer-term expectations are much more positive, with half of all business owners (50%) expecting improved performance for their firms a year from now, while 37% expect no change to their firms’ performance. The remaining 13% expect a weakening in their businesses over the next 12 months.
The higher Canadian dollar is having a mixed impact on small businesses, the federation said. Close to 31% of business owners surveyed say they would prefer a lower Canadian dollar, while 19% think they would be better off with a higher dollar. The remaining 50% of owners say they are not affected by the value of the dollar.
Mallett noted that those who import from the United States would see the biggest benefits to the dollar’s rise, while those who export would experience more difficulties.
Mallett also said the current holiday season is looking positive for independent retailers, with 43% of respondents saying sales are stronger than the same time last year, while 30% say there is no change, and 27% say sales are below the levels of 12 months ago.
He said pharmacies, as well as stores selling hardware, auto parts, general merchandise, music, and clothing are among the businesses that are doing better this holiday season. On the other hand, businesses that sell books, toys, gasoline, home furnishings and cars are not performing as well.
The survey findings also show that the most optimistic sectors for the next 12 months are barbershops and beauty salons, computer and other business services as well as management consulting and equipment rentals, while the least optimistic are crop and livestock farms, gas stations, and hotels and motels.
The survey was conducted between Nov. 22 and Dec. 3 and drew 2,883 responses. The national results are accurate to within plus or minus 1.8 percentage points, 19 times out of 20.