The CFIB’s Business Barometer hit 69.3 in December, an increase from 64 in the previous month and the biggest month-over-month gain in 17 months. A gauge of confidence among small business owners hit a nine-month high in December, the Canadian Federation of Independent Business reported Wednesday — a sign, it says, that entrepreneurs believe the economy is finding “firmer footing” after stumbling into a soft patch in mid-2010.
Confidence among small business owners improved in 10 of 13 sectors through the month of December, compared to a month earlier. And while December is generally associated with improved retail results, the CFIB said the biggest improvements were recorded in manufacturing; natural resources; financial services, mostly real estate and insurance; and construction.
If there was one drawback, the survey indicated just 14% of business owners plan to add to full-time staff levels in the next three to four months, while another 14% plan to cut back. Meanwhile, 17% of businesses surveyed indicated they would cut back on part-time employment, with 70% maintaining present levels.
Jonathan Basile, economist at Credit Suisse, said the 69.3 reading in December is consistent with about 3% annualized GDP growth, and the fourth-quarter average of 66.7 corresponds to about 2.5% annualized growth over time — or better than the 1% expansion reported in the third quarter. An index level above 50 means owners expecting their businesses to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing. The December 2010 findings are based on 825 responses through a Web-based survey, and the findings are said to be statistically accurate to plus-or-minute 3.4 percentage points 19 times in 20. Read more: http://www.financialpost.com/