Economic News/Trends and Analysis — September 8, 2010

Business Barometer(R) - National small business confidence continues to slide

TORONTO, Sept. 8 /CNW/ - Largely a result of uncertain market conditions, optimism among Canada's small- and medium-sized business owners experienced its third consecutive monthly decline in August. According to the latest business confidence survey findings from the Canadian Federation of Independent Business (CFIB), the Business Barometer(R) index fell to 64.9 last month, down from 65.7 in July, and well below 2010's March peak of 69.9.

"The current Barometer reading suggests the economy is only growing at a modest 2 per cent," explained CFIB vice-president and chief economist, Ted Mallett.

Business optimism fell in 7 of 10 provinces, but it was mainly weaker sentiment among firms in Western Canada that drove the national index lower. A nearly six point decline in BC, coupled with one-to-three point reductions in the Barometer indexes in Alberta, Manitoba and Saskatchewan drove the region to below the national average. Shifts in optimism were mixed in Atlantic Canada, rising in Nova Scotia, but falling elsewhere in the region. Against the trend, business owners in Ontario and especially Quebec recorded improving sentiment in August.

Optimism has declined in 8 of 13 major industry groups, including bellwether sectors construction, manufacturing, wholesaling and financial services.

This index is available provincially and by industry. Results and the full report are available at: http://www.cfib-fcei.ca/english/barometer and www.cfib-fcei.ca/cfib-documents/Canada-BarometerHistory.xls

Measured on a scale between 0 and 100, an index level above 50 means owners expecting their businesses' performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing. The August 2010 findings are based on 919 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.2 per cent 19 times in 20.

Business Barometer is a monthly publication of the Canadian Federation of Independent Business and is a registered trademark.

As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs(TM). Established in 1971, CFIB takes direction from more than 107,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.

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