According to the latest Business Barometer Index (BBI) survey from the Canadian Federation of Independent Business, small-business confidence in B.C. remained best in class in July.
B.C.'s BBI reading settled at 72.3 points during the month. A value above 50 means that business owners expecting a stronger business performance over the next year outnumber those expecting a weaker one. While below recent highs, B.C.'s reading exceeded all other provinces for a third consecutive month and remained well above the national index value of 63.2 points.
With the index up more than seven points from a year ago, confidence has clearly climbed in the province and is at nearly the highest level since early 2011. The boost dovetails well with the relatively stronger demand reflected in substantial year-over-year gains in retail, housing and manufacturing.
About 41% of survey respondents stated that current business health was in good shape. A positive flow of local news could also be adding wind to the sails, including liquefied natural gas optimism and growth in the creative economy led by significant expansion announcements in Vancouver by Microsoft and Amazon. Expectations for a strengthening growth cycle in the U.S. have offset some of the effects of early-year economic weakness and geopolitical uncertainties in Europe.
With small businesses employing roughly 45% of all workers in the province and more than half of those outside the public sector, higher confidence lays the foundation for stronger provincial employment growth following a modest start to the year.
While short-term hiring intentions eased, according to the survey, levels remained near multi-year highs. This suggests that businesses are gearing up to hire but are still looking for signs that the stability and growth in the economy are sustainable. Employment growth is forecast to accelerate slightly in 2014's second half but average a slight 0.8% for the year as a whole, following a year of no gain in 2013.
