Retail Outlook Low Before Holiday Shopping Season

Small business confidence took a dip in the lead-up to the holiday shopping season and looking beyond it, says the latest Canadian Federation of Independent Business (CFIB) ‘Business Barometer.’ The optimism index for the next three months dropped to 43.8, while the 12-month index dropped to 50 index points. The 12-month index level is the lowest recorded since 2009, outside of the 2008/2009 and 2020 recessions. Overall, 38 per cent of businesses say they are in good shape and 18 per cent say they are in bad shape, a net positive of +20 per cent that is down from the +22 per cent of October, but better than the +17 per cent of November 2021. Average price increase plans slipped to 3.9 per cent, continuing their downward trend since June, while wage increase plans saw an uptick to 3.4 per cent and remained historically elevated. Full-time staffing plans are in the negative, with slightly more businesses (18 per cent) looking to lay off than to hire (17 per cent) over the next few months, which is in line with seasonal patterns. The retail sector posted the second lowest optimism level on the three-month index (36.5) and the third lowest on the 12-month index (43.6).