Confidence among small and medium-sized businesses fell to a near record low of 86.1 in December, but financial industry firms are more optimistic than a few weeks ago, according to the Canadian Federation of Independent Business.

The latest survey of business optimism released on Wednesday showed that the level of optimism among small businesses fell more than four points in December from 90.3 in October and November. The index hit a high of 101.8 in September.

At 86.1, the barometer remains just above its record low of 85.2 in August 1990.

“Today’s conditions will almost certainly put Canada’s GDP in reverse in the fourth quarter,” said CFIB’s chief economist Ted Mallett, adding “the decline could carry well into the New Year.”

Among finance, insurance and realty companies, optimism was 95.4, a “faint increase” from 94.1 a few weeks earlier, according to the report.

Other industries fared much worse in optimism, including manufacturing firms, at 79.3—down from 85.4 weeks earlier.

Results differ slightly across the country, but expectations fell in every region. The most optimistic businesses reside in Saskatchewan, where the index barely tops the 100 mark. Next in line are businesses in New Brunswick and Newfoundland and Labrador.

B.C., which only two years ago had the most optimistic small business sector, now has the least, dropping to an index level of only 82.9 and just under Ontario’s 83.0. Alberta’s small business owners are also registering an index level of only 84.3.

Employment perspectives appear relatively positive among small businesses. The December index shows 19% of business owners expect to increase their full-time staff by this time next year.

But raises in salary are becoming less likely. The percentage of business owners expecting to give raises in excess of 2% fell to 22%—less than half the level at this time last year.

More than half of all business owners now say the overall investment climate has deteriorated for their companies, compared to three months ago, and nearly 40% of firms say consumer demand has deteriorated.

However, firms have become less concerned about insurance costs, competition and a shortage of qualified labour.