Media Release

Update 5: Business Barometer for week of November 3
Small business outlook up slightly but uncertainty still running high

November 6, 2008

Toronto – With major financial markets showing signs of greater stability in Canada and abroad, surveying this week by the Canadian Federation of Independent Business (CFIB) has revealed a slight rise in optimism by the small business sector in this country. According to CFIB chief economist Ted Mallett, the Business Barometer index had an uptick to 89.8 from a revised reading of 86.9 last week. Mallett said the index is putting a little more psychological distance between its current level and the previous record low of 85.2 from mid-1990. “Though any rise should be viewed as positive,” said Mallett, “one still cannot say for certain that a turning point has been reached as uncertainty remains high.”

Mallett said that adding to the sense of stability, credit concerns appear to have levelled out since spiking earlier in October as the financial crisis developed. He added that although higher than ideal, the number of firms reporting problems accessing bank financing has been held to 25 per cent during the week, almost identical to last week’s finding. Nevertheless, a low 3 per cent of respondents said they have actually found it easier to obtain credit financing, nearly the same reading of a week ago, according to the chief economist.

Employment markets continue to be on the weak side, said Mallett, but the optimists still narrowly outnumber the pessimists. He said 21 per cent of owners have expectations of adding to full-time employment levels in the next 12 months, nearly the same as the 20 per cent who felt the same way last week. He added that 16 per cent reported intentions to cut back.

Mallett said although there remains a full range of expectations among small business owners, they are within the norms established in the past few weeks. He pointed out for example, that about five per cent expect to perform ‘much stronger’ in the next 12 months, which is close to last week’s reading of four per cent, while 24 per cent now expect to be ‘somewhat stronger’ -- up from 19 per cent who expressed this view a week ago. He added that seven per cent anticipate being ‘much weaker’ in 12 months, while 34 per cent -- a drop from last week’s 39 per cent -- expect to be ‘somewhat weaker’.

Mallett said it should be noted these perspectives do not yet represent firm plans by small business owners in that developments in financial and commodity markets are still too volatile and uncertain to allow them to plan effectively. He further stated that growth may be paused for the moment, but longer term performance of small- and mid-sized enterprises will depend on how markets settle out over the next few weeks and months.

This special Barometer series is meant to fill the information vacuum for business owners and policymakers looking for guidance. Usually conducted quarterly, CFIB is running the Barometer survey on a weekly basis for six weeks, having begun on October 6. These findings are based on the responses of 694 business owners surveyed between November 3 and 4, 2008. The survey was sent to 8,000 randomly selected CFIB members on November 3, and conducted via a secure web interface. Results can be considered accurate to within ±/- 3.7 percentage points 19 times out of 20. The next survey will be sent to a new list of 8,000 members on November 10, and results will be released on November 13, 2008. Further details are available at www.cfib.ca.

For more information, contact Gisele Lumsden at 416-222-8022 or one of our provincial offices.