SME confidence at its lowest since April 2020

Canadian small business owner confidence dropped significantly in early January 2022, to a similar level to spring 2020, according to the Canadian Federation of Independent Business (CFIB) business barometer.

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The results released on Tuesday showed that the three-month confidence index lost more than 10 points (34.5), while the 12-month index fell to 52.4. “These are the lowest results since April 2020,” CFIB noted.

“The last time we saw such a low confidence index was in the spring of 2020. Staffing plans have been negative again, and managers of small and medium-sized businesses who think their company is currently in difficulty are outnumbered, and who consider it healthy,” said Simone Goderault, vice president of national research. At CFIB, this clearly shows that many companies are in a precarious position.

In fact, the study revealed that 24% of small business owners currently plan to reduce their full-time workforce over the next three months, while only 16% plan to hire employees. And 31% of them said their business is not going well, while 29% said they were happy with their results.

“It was just the opposite in December, when only 19% of entrepreneurs regretted their results, compared to 39% who were satisfied with it,” we can read as well.

The current situation takes us back to the early months of the epidemic. At the time, heads of small and medium-sized businesses did not know when they could reopen and faced difficult choices, such as considering layoffs and even closing their doors permanently to reduce their losses,” recalled Andrea Bourgeois on her part, Director of Economics at CFIB.

The CFIB considers this data “extremely disturbing” and that a critical threshold has been reached for these companies that are “at the end of their tether and have accumulated huge debts”. It is calling for provincial governments to quickly lift COVID-19-related restrictions and provide additional assistance to small and medium-sized businesses.

The survey was conducted with 503 CFIB members on January 6 and 7, 2022.

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