Jan 3, 2023
Small Businesses Start New Year With Mixed Outlook
Small businesses wrapped up 2022 with a mixed outlook, says a Canadian Federation of Independent Business (CFIB) ‘Business Barometer.’ Despite ongoing challenges, the state of business this December was virtually back to where it was three years ago: 38 per cent of entrepreneurs said their business was in good shape and 17 per cent described their situation as bad (those shares were 38 per cent and 16 per cent respectively in December 2019). “Although it is encouraging to see some things going back to normal, such as how entrepreneurs perceive the overall state of their business, we have to recall that recovery, especially on the financial side, remains elusive for too many,” says Simon Gaudreault, chief economist and vice-president of research at CFIB. “Our Small Business Recovery Dashboard shows 52 per cent still have below normal sales and 58 per cent carry outstanding pandemic debt, for an average of more than $114,000.” It also says that capacity utilization has been hovering around almost 80 per cent – a good level – in 2022 and supply chain indicators showed continuous improvement throughout the year. Shortages of skilled or semi-/unskilled labour eased up recently, but they remain a big headache, currently affecting 49 per cent and 36 per cent of businesses, respectively. And various costs continue to cause difficulties for historically high shares of small businesses, including fuel and energy (73 per cent), insurance (64 per cent), wages (61 per cent), product inputs (49 per cent), borrowing (37 per cent), and capital equipment and technology (27 per cent). Meanwhile, the 12-month index registered 50.9 index points this month, a modest 0.9 increase over last month. Firms in retail, agriculture and construction were the least optimistic with levels below 50. The short-term outlook dropped more than three points to 40.2.