Small business confidence continues to plummet in Canada as businesses grapple with rising costs and labor shortages, according to new Canadian Federation of Independent Business (CFIB) survey data.
According to CFIB, more businesses are feeling less optimistic about the holiday season, according to the latest business barometer. The 12-month optimism index fell to 50 points. This is a level not seen since the economic slowdown caused by the 2020 pandemic. Aside from the 2020 decline, November’s decline is the lowest level recorded since 2009. According to the CFIB, the index level is usually around 65. It shows that the economy is growing to its full potential.
“For many small businesses, the situation remains challenging,” said Simon Gaudreault, CFIB’s chief economist and vice president of research, in a statement.
“The high cost of doing business, staff shortages and ongoing interest rate hikes make it difficult to know for sure where business is going.”
A CFIB survey found that rising borrowing costs are causing problems for 35% of business owners, compared to 17% last year.the bank of canada One of the most aggressive tightening cycles in its history We are trying to fight soaring inflation.
The survey also found that 71% of companies said fuel and energy costs were the top factor limiting business growth, followed by skilled workers (53%) and semi-skilled/unskilled workers. ” There continues to be a shortage of workers (38%).
The results come ahead of the holiday season, a critical time for many small businesses, especially retail. While optimism levels are typically expected to rise in the retail sector over the holiday season, the outlook for retail remains grim, with him falling to its third-lowest level in the past 12 months.
An Equifax Canada survey released last week found that 60% of Canadians said they would spend less on gifts this holiday season because of inflation. A survey by Equifax Canada found that 1 in 4 (25%) of small business owners said they were more confident about the 2022 holiday season than they were in 2021, and 36 % is down from last year when they were confident.
“For many, the usual growth expected from holiday sales does not appear to be what they expect this year,” CFIB economic director Andrea Bourgeois said in a statement.
“With big shopping events like Black Friday, Small Business Saturday and Cyber Monday looming this weekend, this is another reminder to support local businesses.”
The CFIB’s November Monthly Business Barometer Survey was based on 719 online responses from business group members with a margin of error of +/- 3.7%, 19 out of 20.
Alicja Siekierska is a Senior Writer for Yahoo Finance Canada. follow her on her twitter @alicjawithaj.