One in five businesses (21%) report being in a good economic health, according to the June Business Barometer® survey released on Thursday by the Canadian Federation of Independent Business (CFIB).
The long-term optimism index gained 7.1 points, reaching 47.3 in June. While it’s been steadily increasing for the past three months, it remains below the breakeven point of 50, it said.
Average price plans remained unchanged at 2.9%, and similarly wage plans were almost the same at 2.2%. Weak consumer demand, while easing, remains the top limitation for over half (51%) of small firms, added the CFIB.
“Early signs point to small businesses getting used to tariffs and finding alternatives, but many are not out of the woods just yet. While most indicators stayed the same or slightly improved, businesses are still feeling the impacts of the lingering inflation, tariffs, counter-tariffs and overall economic uncertainty,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
Summer season off to a bumpy start for tourism firms
CFIB said its special release on tourism shows that long-term optimism among tourism businesses sits at pandemic-era levels (40.8 index points),which is among the lowest levels recorded in the last 16 years. Although summer is tourism’s busiest season, only 14% of businesses in the industry are planning to hire in the next few months, while record-low consumer demand continues plaguing 57% of tourism firms.
“Recent trade tensions, uncertainty and lack of consumer demand are hitting the tourism sector hard. It’s also concerning that in the past 11 months their hiring plans have been in the red,” said Andreea Bourgeois, CFIB director of economics. “We urgently need governments to reduce taxes, promote buying local, and ease the costs of doing business if we want to improve Canada’s economic state and help businesses make the most out of this critical time of year.”
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