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Canada's Small Businesses Staying Downcast in June, CFIB Business Barometer Shows

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Small business confidence in Canada saw virtually no change in June, with the index remaining below the 50-point mark that for a second month in a row, said the Canadian Federation of Independent Business (CFIB) Business Barometer published on Thursday.

A reading below 50 means business owners expecting a weaker performance over the next three or 12 months outnumber those expecting stronger performance, the CFIB said.

Fuel remains the top cost constraint for 66% of small businesses, while weak demand continues to weigh on more than half, or 53%, of the firms, CFIB said. The share of businesses reporting challenges with capital equipment and technology costs has steadily climbed over the past two and a half years, reaching 38% of small firms.

"Although early signs from abroad suggest the worst of the fuel shock may be behind us, many consumers and businesses remain under strain, and the outlook is still uncertain," said Simon Gaudreault, CFIB chief economist and vice-president of research, in a statement.

Price plans have held near the 3% mark for three consecutive months, which is the upper end of the Bank of Canada's inflation target range, added the CFIB.

Hiring plans remain "muted" even coming into the busy summer tourist reason, CFIB said. Some 12% of small firms are planning to hire full-time staff and 11% planning to take on part-time employees over the next three months, the group said.

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