After a seven-month upswing, small business optimism dropped in June, the Canadian Federation of Independent Business (CFIB) said in a release on Thursday.
The CFIB’s monthly small business optimism index, based on 528 CFIB members’ 12-month forward expectations for business performance, dropped 2.1 points in June to settle at 54.1 — two points below last month’s high for 2023.
A reading above 50 indicates that more business owners feel confident than negative about business performance in the coming year. A reading near 65 indicates that the economy is growing at its potential.
“National small-business optimism as measured through our index remains far below its historical average of 61,” Simon Gaudreault, CFIB’s chief economist and vice-president of research said in the release.
The survey of members also showed that the pressure on businesses’ average wage and price plans was less intense in June compared to the previous month.
“Price, labour and demand indicators all show results consistent with an economy that is losing some of its steam,” Gaudreault said.
While one month doesn’t make a trend, “several signs tell us we may finally be seeing some cooling of the economy,” he said.
Among sectors, retail posted the biggest decrease in 12-month optimism (–10.8 index points to 44.3), remaining at the bottom of the optimism scale.
The three sectors at the top of the scale were information, arts and recreation (69.1); hospitality (60.8); and health and education (60.5).
Finance, insurance and real estate took a big jump in June, moving up 10.2 points to 55.9.