CFIB confidence measure hits two-year low in August
Confidence among Canadian small business owners plunged in August, dropping to the lowest reading since July, 2009, according to the latest monthly Business Barometer Index from The Canadian Federation of Independent Business.
The index dropped 6.6 points to 61.7 last month from 68.3 in July.
That puts it below the normal range of 65 to 75 when the economy is growing, according to the CFIB. But an index level above 50 means that owners expecting their business's performance to be stronger in the next year outnumber those expecting weaker performance, the CFIB said.
Given the economic troubles globally last month, "these results are not altogether unsurprising," said CFIB chief economist and vice-president Ted Mallet in a statement about the findings, based on 957 randomly sampled responses from CFIB members.
"The raucous debt ceiling debate in the U.S. and turmoil that followed in equity markets worldwide rightly caused business owners to pay attention to their own planning," he said.
"But of note, although confidence suffered, owners' views of actual current business conditions held up reasonably well," he added.
Signals of the current state of business operations, from new orders to unsold inventories to staff overtime, all "regressed" in August, the CFIB said, though it called those "mainly corrections" for "very strong" July measures and noted they are well above measures during the 2009 recession and early recovery.
Capital spending intentions also suffered, "as more business owners decide to postpone decisions on vehicles, equipment and real estate," Mr. Mallet noted.
However, he also added that such spending has short lead times and so "would respond positively and quickly in the event of signs of greater economic stability."
Across the country, the largest declines came in Ontario and Quebec, with drops of eight points and five points respectively, to around 60. Alberta's businesses were the most optimistic, with a score of 75, followed by Saskatchewan, at 69.1, and British Columbia, Manitoba and Newfoundland and Labrador all hitting around 65.
Newfoundland and Labrador this week also followed seven other provinces and the federal government in declaring 2011 the Year of the Entrepreneur.
U.S. owners fear double-dip recession but are prepared for another downturn: survey
Nine out of 10 U.S. small business owners are concerned about the economy, including the possibillity of a double-dip recession -- but nearly eight in 10 (79 per cent) said they are prepared if the economy takes another downturn, according to a new survey from Citibank.
A vast majority -- 94 per cent -- also said they feel responsible for the nation's economic recovery.
The survey also found that 78 per cent of the 1,000 small business owners polled said they plan to keep the same number of employees while 17 per cent plan to hire more and just 5 per cent plan to cut. As well, 30 per cent plan to hire temporary or part-time workers instead of full-time employees.
In addition, 49 per cent said they are "holding their own, but poised to grow when the climate is right" and 28 per cent said they are already growing.
For the rest of the year, half say they intend to be "steady as she goes -- continuing much as we are now," but for next year, 61 per cent aim to increase their marketing efforts, 58 per cent seek better pricing from suppliers and vendors, 56 per cent plan to introduce new products and services, and 45 per cent will work longer hours.
Topping their concerns for the coming year, 64 per cent cited consumer confidence, for 63 per cent it was maintaining or increasing sales, and 62 per cent looked to taxes or government regulations.
"It's encouraging that small businesses feel prepared to seize the opportunity for growth when it presents itself," said Raj Seshadri, head of small business banking at Citibank, in a statement accompanying the survey release. "The underlying message here appears to be that small business owners are preparing themselves for a more sustainable growth path, and are not expecting any type of quick fix or change."
The Ontario Bean Producers' Marketing Board is getting $840,000 to develop new bean varieties aimed at improving crop yields and quality, and advance Canada's dry bean industries, according to a release from Agriculture and Agri-Food Canada.
The money is coming from the Developing Innovative Agri-Products (DIAP) initiative, part of a $158-million, five-year Agri-Innovations program to support industry-led science and tech projects.
EVENTS AND KEY DATES
Answering sustainability questions
The Network for Business Sustainability will bring together sustainability experts and businesses to help small and mid-sized companies with their sustainability practices at a three-day conference to be held in Montreal on Oct. 20 to 22. For more details, click here.
Planning for the exit
For the many small- and medium-sized business owners planning to head for the exit doors over the next decade, SBLR Chartered Accountants is holding a breakfast seminar on how to protect and maximize the value of their businesses. The seminar, being held on Sept. 22, will feature SBLR partner Jordan Gould and Jay Papernick, a financial adviser at Assante Wealth Management. For further details, click here.
EDITOR'S PICKS FROM REPORT ON SMALL BUSINESS
Off-the-shelf technology or a custom design?
That's the decision that Dependable Mechanical Systems must make in our latest Challenge, as the company ponders how best to come up with new information management software to allow every member of its team to communicate in real time.
FROM THE ROSB ARCHIVES
Ten lessons for success in India
India can be a rich but complex and challenging environment in which to do business. In January, columnist Narayanan Madhavan brought 10 lessons for small and medium-sized businesses to help score success there.
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