Business confidence slump continues in November for Newfoundland and Labrador

Despite a small increase in small business confidence in November, Newfoundland and Labrador remains below the national average.
A report released Thursday by the Canadian Federation of Independent Business (CFIB) show Newfoundland and Labrador, along with Nova Scotia, Alberta and Saskatchewan all stayed under the national average. Newfoundland and Labrador came in at 51.8
Overall, small business confidence rose 0.7 points to 61.2 in November, but performed below expectations, according to the CFIB’s Business Barometer® index.
“Business confidence hasn’t grown as would be expected compared to the current GDP growth,” Ted Mallett, CFIB’s vice-president and chief economist, said in a news releases.
“Most provinces, however, are showing lower confidence levels compared to last month. Even Quebec, which reached record high confidence levels in September, plummeted below the national average,” he added.
Forty-two per cent of owners report that their business is in good shape this month, compared to 11 per cent who say they are in bad shape. Hiring intentions are back to normal seasonal levels, with 18 per cent who plan to hire additional full-time staff in the next few months versus 14 per cent who plan to cut back.
An index level between 65 and 70 normally indicates that the economy is growing at its potential and a majority of owners expect their business’s performance to be stronger in the next year.
An improvement in business outlooks was shown in New Brunswick (67.2) and British Columbia (63.1), but sentiment cooled markedly in Nova Scotia (55.1) and Quebec (60.9).
Quebec experienced another major drop in confidence this month, falling to 60.9 index points. Prince Edward Island lost some of its confidence, but remained the most optimistic province at 69.2, followed by New Brunswick at 67.2, which experienced the greatest confidence gain. British Columbia experienced a modest gain to 63.1 points. Ontario and Manitoba lost confidence but remained near the national average. Nova Scotia, Alberta, Newfoundland and Labrador and Saskatchewan all remained below the national average.
CFIB said in its November synopsis that businesses expect to increase prices by about 2.2 per cent over the next 12 months, while wages are expected to rise by about two per cent.
In addition, employment plans appear to have returned to seasonally normal levels, with 18 per cent of owners hoping to hire additional full-timers versus the 14 per cent who are expecting to cut back.
Overall, approximately 42 per cent of business owners say they are in good shape while 11 per cent say they are in poor shape — pretty much the average for the year to date.

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