Business Barometer

Results of December 2008 Survey on SME Business Expectations

Ted Mallett, VP Research & Chief Economist

The downward tumble of small business optimism has slowed, but not stopped. The global financial crisis, which has hit economies hard around the world has left its mark on Canada’s business owners. CFIB’s Business Barometer® index has fallen to a near record low of 86.1 in December, from 101.8 in early September and 90.3 in October and early November (see Figure 1).

It is little comfort or symbolism that the index still remains above its record low of 85.2 registered in August 1990—at the start of Canada’s previous official recession. Todays conditions will almost certainly put Canada’s GDP in reverse in the fourth quarter, and the decline could carry well into the New Year. Although glum, there is no panic. Small business owners still support only modest and measured government fiscal stimulus as a way out .

Looking at performance in the previous 12 months, about 29 per cent of business owners say their performance is much stronger or somewhat stronger than last year, while 40 per cent say performance is much worse or somewhat worse—slightly more pessimistic than figures obtained in September (see Figure 2). Most appear to be bracing for a cold winter—with respect to short-term 3-month expectations—where only 17 per cent of business owners expect improvement and 44 per cent expect worsening performance.
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