Small Business Confidence Drops as Fuel Costs Rise

Long-term small business confidence fell to 55.8 points in March, down 9.5 points month-over-month, reports the Canadian Federation of Independent Business (CFIB).

“Just when we saw a glimmer of hope, fuel prices and supply chains are causing hardships again,” says CFIB director of economics Andreea Bourgeois. “The 12-month index improved gradually over much of the past year, though with some fluctuations, but it has dropped sharply to levels recorded last fall.”

In March, concerns over costs rose, with 50 per cent of businesses worried about fuel, up from 36 per cent in February, and 44 per cent concerned about input products and raw materials, compared to 32 per cent the previous month.

Average wage hikes were steady at 2.2 per cent, while planned prices rose sharply to 2.7 per cent from 2.2 per cent in February.

Fifty-seven per cent of small businesses also reported challenges with insufficient demand, up seven per cent from February. This indicator has been above its historical average (38 per cent), unseen in two and half years.

“Weak domestic and international demand has been a major pain point for small business owners for the past two years, and we’re already hearing concerns that high prices at the pump will put even more pressure on both businesses and consumers,” says Simon Gaudreault, CFIB chief economist and vice-president of research.