Over half (53%) of small businesses say insufficient demand is limiting their sales or production growth, finds the October 2024 Monthly Business Barometer® by the Canadian Federation of Independent Business (CFIB).
This indicator has been trending upwards for more than two years and is now well above its historical average of 37%, said the CFIB in a news release.
“Today feels a bit scary, and not just because it’s Halloween. The last time we saw this many businesses having difficulties with weak demand was in April 2020. While the Bank of Canada has started cutting interest rates, consumers are not displaying any sugar rush yet,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research. “We are soon entering the holiday shopping season, and many retailers will also be hoping for a boost in sales to make up for a year that has been challenging so far.”
Small businesses’ average wage and price increase plans reached 2.7% and 2.5% this month, respectively, said the report.
“The long-term small business confidence index remained unchanged at 55.8 in October. Among the sectors, agriculture (43.5%) and hospitality (51.7) were the least optimistic over the long term. Businesses in retail have been displaying stable levels of optimism over the next 12 months, sitting at 54.6 in October,” said the CFIB.
“Elevated shares of businesses continue to report difficulty with numerous sky-high cost constraints, including wages (71%), insurance (70%), and taxes/regulations (69%). On the bright side, the share of firms grappling with borrowing costs has been trending downward, reaching 36% in October, down from 43% in September.”
“It’s nice to see a significant drop in the share of businesses struggling with borrowing costs. While many spooky challenges remain on the costs and demand sides, the Bank’s rate cuts have at least started making financing a bit more accessible,” said Andreea Bourgeois, Director of Economics at CFIB.
The CFIB is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region.
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