Canadian small business still confident - and happy
July 07, 2011
Confidence among Canadian small companies and entrepreneurs declined slightly in June, according to the most recent Business Barometer from the Canadian Federation of Independent Business.
The confidence index fell from 66.9 in May to 66.3 in June - a significant decline from the April peak of 70.7, further suggesting Canada's economic recovery slowed in the spring - likely in response to skyrocketing energy and commodity prices.
However, a number of analysts have pointed to the overall trend in small business confidence as showing marked improvements since its recession-era lows.
"Although a negative result, the index and other general indicators of business performance from our monthly survey are in line with June 2010 levels," said Ted Mallett CFIB vice president and chief economist, in a statement. "Shorter-term perspectives on business performance and hiring three or four months ahead are also settling a bit. However, these changes are not unusual for this time of year."
Small firms in Alberta were noted as the most confident, showing an index reading of 76.2, followed by British Columbia, Manitoba and Saskatchewan. Prince Edward Island showed the weakest value at 57.1 points.
Additionally, businesses in the financial services, wholesale trade and personal services sectors reflected the strongest economic confidence.
The report comes the same week as a study by TD Canada Trust that found a large majority of small business owners consider themselves to be "very happy." The 2011 TD Canada Trust Small Business Survey found two-thirds of small company owners describe themselves in this way.
Meanwhile, the report also evaluated small business happiness according to city. Montreal led the pack with 70 percent of respondents expressing strong levels of happiness, followed by Toronto (68 percent), Vancouver (66 percent) and Calgary (60 percent).
"Many people dream of being their own boss and owning their own business one day, so it's no surprise that so many small business owners are happy where they are right now," said Alec Morley, senior vice president of small business banking at TD Canada Trust.
"In 2011 we saw an increase in the happiness levels of small business owners compared with the previous year," Morley added. "When owners are optimistic, they tend to be more likely to invest in their business by boosting spending and hiring, which is great for their local communities."