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Jun 30, 2023

June small business optimism losing steam

After a seven-month upward streak, the small business optimism index for the next 12 months dropped 2.1 points, sitting at 54.1 in June, says the latest Canadian Federation of Independent Business (CFIB) Business Barometer. Atlantic Canada is doing relatively better than the rest of the country in June due to the start of the summer tourism season, with all four provinces reporting long-term confidence indexes above 60. As for sectors, retail posted the biggest decrease in long-term optimism (-10.8 index points to 44.3), remaining at the bottom of the optimism scale, while information and recreation (69.1) topped the sector rankings.  

“National small-business optimism as measured through our index remains far below its historical average of 61. Meanwhile, other results from our tracking survey point to early signs of an economic slowdown,” says Simon Gaudreault, chief economist and vice-president of research at CFIB. “Price, labour, and demand indicators all show results consistent with an economy that is losing some of its steam.” At the same time, the consumer price index dropped to 3.4% in May, the lowest it's been since June 2021. The Barometer shows the pressure on average wage and price plans was less intense in June. The average price plans had one of the largest decreases this year, reaching 3.3%. Small businesses expect to increase wages by an average of 2.9% over the next 12 months. While still fairly high, both plans are on a clear downward trend since they peaked at this time last year.  

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