After a string of seven months of optimism, small businesses in Canada are pulling back their outlook for the next 12 months.
The latest Canadian Federation of Independent Business (CFIB) Business Barometer dropped 2.1 points.
Retail posted the biggest decrease in long-term optimism (a drop of 10.8 index points) to finish at the bottom when all sectors were ranked, CFIB reported.
With a score of 54.1 points in June, optimism is well below the typical average of 61 points.
“Meanwhile, other results from our tracking survey point to early signs of an economic slowdown,” said Simon Gaudreault, chief economist and vice president of research at CFIB. “Price, labour and demand indicators all show results consistent with an economy that is losing some of its steam.”
The group noted that there are indications that the labour market is somewhat cooling —45 per cent of businesses reporting that shortages of skilled workers are slowing them down, which is the lowest share in close to two years.
For semi- or unskilled workers, the situation is more stable, CFIB said, as now 34 per cent of businesses say shortages are slowing their progress. Fewer employers (18 per cent) were looking to hire in the next three months, compared to May (22 per cent) or the same time last year (23 per cent).
“The demand for labour is usually stronger this time of year. Small business owners may be adjusting to labour shortages or cutting down on hiring, choosing instead to work more hours themselves or reduce their services. Immigration is also through the roof, meaning there’s an influx of candidates on the market. While they may not be immediately hired, it should ultimately help employers find qualified staff,” said Andreea Bourgeois, CFIB’s director of economics.