Business sentiment softened slightly in September, based on the latest data from the Canadian Federation of Independent Business (CFIB).
The CFIB Business Barometer, a measure of small business confidence for the upcoming 12-month period, decreased one point to 52.5 in September. Short-term optimism, based on the three-month outlook, was 49.5, a half-point drop from the previous month.
“There’s been a slight ease on small businesses, but many challenges, including inflation and labour shortages, are still holding many firms back,” said Andreea Bourgeois, director of economics with CFIB, in a release on Thursday. “Their sentiment held steady in September but with no improvement.”
TD economist Rishi Sondhi noted in a report that business confidence remained “well below” the barometer’s long-run averages, and that other activity, such as capacity utilization and hiring plans, had also softened.
As a result, the barometer is “firmly in line with our view for a significant slowdown in second-half economic growth,” Sondhi wrote.
The barometer also reflected a less inflationary backdrop as growth weakens, Sondhi added.
For example, planned wage increases remained below their June peak, and businesses’ plans for price increases continued their downward trend.
The monthly findings were based on 687 responses, received between Sept. 6 and Sept. 22, from a stratified random sample of CFIB members.