Thursday, 3 February 2011

Small-business optimism in Canada

Sentiment among small- and medium-sized businesses in Canada was down slightly last month, according to a monthly survey.

The Canadian Federation of Independent Business on Wednesday said its "business barometer" for January was 68.9, down from 69.3 in December.

Despite the decline, the CFIB said the results show the rise in optimism that took place late in 2010 has continued into the new year. The barometer spent most of last year in the mid-60s.

The CFIB says scores greater than 50 show most business owners expect conditions to improve over the next year. If the index is between 65 and 75, that's usually indicative of economic growth, it says.

Earlier this week, Statistics Canada said there was a 0.4 per cent expansion in gross domestic product in November, the most economic growth seen in eight months.

The CFIB said the current optimism among small-business owners is showing up in increased orders and intentions to invest in production equipment.

"It appears to be the business-to-business side of the economy that is powering this latest improvement," said CFIB chief economist Ted Mallett.

"After supporting the economy so well earlier in the recovery, the consumer-led sectors have remained in the background."

The strongest business sentiment is being seen in Manitoba, Saskatchewan, Newfoundland and Labrador, and British Columbia. The weakest is in New Brunswick and Nova Scotia.

The CFIB's January business barometer was based on web surveys with 967 businesses. The results are considered representative within 3.2 percentage points, 19 times out of 20.

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