Small business confidence is ticking up slowly, according to the Canadian Federation of Independent Business’ July Business Barometer.
The long-term small business confidence index hit 50.9 points this month, exceeding the breakeven point of 50; in April, this index was at 34.8 points. According to CFIB chief economist and vice-president of research Simon Gaudreault, this result suggests stabilization.
“The economy is stabilizing in some ways, and the direction we’re heading in is more encouraging. We’re not in the worst spot compared to previous months, but there’s still not a lot of optimism out there,” Gaudreault said in a statement.
He added that business owners have begun adjusting to “the new trade reality,” which could have revived optimism.
“Although there’s a lot of uncertainty caused by the U.S. administration, many announcements have not materialized in effective tariffs yet,” Gaudreault said.
Small businesses also indicated that they intended to raise prices and wages by 2.7 percent and 2.1 percent on average, respectively, suggesting that inflation pressure has lightened. Nonetheless, 54 percent of businesses struggle with low demand as a barrier to growth while 68 percent of small firms saw tax and regulatory costs as a challenge.
Businesses are typically looking to hire in the summer, but this month, 16 percent of businesses expressed an intent to lay off staff compared to 13 percent last month. Just 12 percent of firms intended to recruit staff in July compared to 15 percent last month.
“Business owners tell us they’re dealing with trade and economic uncertainty, increased costs, and difficulty keeping up with taxes and regulations. Having long-term clarity would mean a great deal to small businesses right now,” said Andreea Bourgeois, CFIB director of economics.
The July Business Barometer collated 719 survey responses from CFIB members. The survey was conducted from July 3 to 8.