Pessimism grows for business owners

Optimism among small business owners in Saskatchewan slipped in July and remains below the national average, according to the Canadian Federation of Independent Business (CFIB) in its latest monthly business barometer survey released Thursday.

“Saskatchewan’s small business optimism lost some traction in July, with its index dropping to 51.1, erasing the gain seen in June,’’ said Marilyn Braun-Pollon, CFIB’s vice-president for Prairie and agribusiness.

“Hiring plans are non-existent, with nine per cent of business owners looking to hire full-time over the next three months while 10 per cent are looking to reduce staff,” Braun-Pollon said.

“It’s evident the excess moisture from significant rainfall throughout the province is impacting business optimism, with many farmers experiencing flooding and crop damage,’’ she added. “However, the general state of business health has seen a small improvement, with 43 per cent of business owners reporting their businesses are in good shape, while 16 per cent say their firms are in poor shape.”

The survey also found that weak demand remains the main operating challenge for small business (53 per cent), followed by management skills and time constraints (29 per cent). Major cost pressures for small business are taxes and regulatory costs (48 per cent); wage costs (36 per cent); insurance costs (36 per cent), and banking service fees (36 per cent).

Canada’s small business owners were also a little less confident in July, as optimism fell back to 57.6 this month from a 13-month high of 60.0 in June.

“Though we see a bit of a dip nationally, we continue to see a slow and steady recovery in Alberta, where small business confidence took a big hit ... last year,” said Ted Mallett, CFIB’s chief economist.

Index declines were seen this month in six of 10 provinces; British Columbia (66.4), New Brunswick (63.3), Ontario (61.2), Nova Scotia (58.5), Manitoba (56.4) and Saskatchewan (51.1). Notable improvements in Prince Edward Island (68.8), Quebec (64.1), Newfoundland and Labrador (50.0), and Alberta (46.7) helped temper the drop in the national average.

An index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance.

July’s survey findings are statistically accurate, plus or minus 3.9 per cent 19 times in 20.