Small business confidence continues dive

Small business confidence kept diving in November, with the Canadian Federation of Independent Business (CFIB)'s Business Barometer 12-month outlook index reaching a very low 45.6 points. Outside of the past three months, sub-50 index readings have only been recorded during the 2008/2009 and 2020 recessions. 

Almost all provinces posted drops in confidence, with Quebec (42) and Ontario (45.4) remaining at the bottom of the optimism scale. Among sectors, businesses in agriculture (32.4), hospitality (40.0), retail (40.5), and construction (45.8) registered low levels of optimism in November. An index level below 50 means there are more owners who are negative than positive about their own business' outlook. 

The insufficient domestic demand indicator has been on the rise since May and reached its highest point since September 2020, with 46 percent of businesses now reporting it is limiting their sales or growth. It has now taken over as number one on the list of business challenges, with labour shortages being displaced after a long stint at the top. Several other indicators, such as below normal unfilled orders, also pointed to signs of slowed demand.