B.C. business owners’ confidence in their firm’s performance over the next year dropped from its lofty levels last month, according to a Canadian Federation of Independent Businesses (CFIB) survey. However, business sentiment remains high compared to other provinces.
“Despite the pullback .... overall business confidence continues to hold up reasonably well,” said TD Bank economist Warren Kirkland in a note to investors.
Although B.C. business owners are less optimistic than they were in June, the province has one of the highest confidence indexes in the country, second only to P.E.I.
CFIB measures business confidence by asking their membership of small business owners to predict their performance over the next year. According to CFIB, an index of 65 to 70, out of 100, typically means the economy is growing at its potential.
After posting a two-point gain in June to reach 69.3, B.C.'s confidence index dropped to 66.4. Even with the three-point drop, Kirkland said the province continues to exceed expectations.
“British Columbia and Ontario continue to outperform, with business confidence and forecast GDP growth in 2016 well above average,” said Kirkland.
One quarter of all B.C. businesses expect to increase their employment levels within the next year, while only 9% say they intend to decrease the size of their workforce. Major cost constraints listed by B.C. business owners were taxes, regulatory costs, wages as well as bank and account costs. Over one third of B.C. businesses said skilled labour shortages and insufficient domestic demand were limiting their sales and production growth.Alberta had an index of 46.7 and Saskatchewan had an index of 51.1. Confidence in agriculture and the natural resourse sector continued to drag with national indexes of 53.9 and 55.4 respectively.
Only 10% of respondents in both Ontario and B.C. say general business health is bad.
