Issue 20-97: CFIB: Business Barometer Index
May 29, 2020
The Canadian Federation of Independent Business (CFIB) uses results from a survey of its members to create the Business Barometer Index, which measures small business confidence. The CFIB expanded the program from a monthly to a biweekly survey through June 2020 due to the COVID-19 pandemic. These barometer index survey results correspond to the last week of May 2020. According to CFIB, an index above 50 signifies that owners that expect their business to perform better in the next year outnumber those that expect a weaker performance.
British Columbia’s Business Barometer Index was 52.7 in the last week of May, 23.9 points above the record-low 28.8 recorded at the end of March. British Columbia respondents were operating at an average capacity of 50.8%, slightly above the national average of 49.1%.
Business confidence varied among provinces, ranging from a high of 59.2 in Nova Scotia, to a low of 30.0 in Prince Edward Island.
Nationally, the Business Barometer Index measured 52.5 at the end of May, up 21.7 points from its record low reading of 30.8 in the second part of March. The range is also wide among industrial sectors, with a low of 37.5 (in both the natural resources, and the information, arts and recreation sectors), and a high of 59.4 (in both the health and education services, and finance, insurance and realty sectors).
More than half of businesses reported that their current level of unfilled orders is below normal (59.6%) and cited lack of domestic demand as a reason to not increase sales or production (53.9%). Over one third of businesses expect to reduce full-time employment levels in the next three to four months (36.9%).
Some business metrics improved since late March, with 12.9% of respondents now expecting to increase full-time employment levels in the next three to four months, compared to 5.3% in the earlier period. More businesses also expect their companies to perform better in the next twelve months with 42.2% of respondents expecting a somewhat or much stronger performance in the coming year, compared to only 21.6% at the end of March.
Data Source: Canadian Federation of Independent Business