While small business optimism across Canada has surged upwards in October, confidence in P.E.I. has fallen for the fourth consecutive month, dropping to a nation-trailing low of 52.7, says the latest CFIB survey.
Nonetheless, that figure actually compares quite well to October levels of the past two years, suggesting there may be some latent seasonal factors at play.
Nationally, Canadian Federation of Independent Business’s latest Business Barometer® Index is up more than two points from September levels; and, at 67.8, it is the highest reading in more than three years.
“While this month’s optimism reading has clearly jumped upwards, there are questions about its sustainability,” said Ted Mallet, CFIB’s chief economist and vice-president. “Fewer concerns about energy costs are fueling this surge. Ontario businesses in particular saw a big spike in optimism, while others have fallen or remained steady.”
The improvement in optimism is not uniform, however, raising questions about its sustainability into the future. Ontario’s index surged up almost six points on the month to 71.1 — a rate of change that is almost always followed by a correction a month later. Alberta too saw its index improve to a nation-leading 74.6, despite uncertainty over oil and gas industry pricing trends.
Much more modest gains in business confidence were noted in British Columbia (71.9) and New Brunswick (61.4), while optimism held, or actually fell back everywhere else. Business owners in Newfoundland and Labrador registered the steepest drop in sentiment, with their index dropping more than five points to 68.5. Index declines were modest everywhere else.
Measured on a scale between 0 and 100, an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. An index level of between 65 and 70 means the economy is growing at its potential.
October 2014 findings are based on 883 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received through October 20. Findings are statistically accurate to +/- 3.3 per cent 19 times in 20.
