The level of confidence among small business owners retreated in June, indicating that an economic recovery is not yet taking hold, according to the Canadian Federation of Independent Business.

The CFIB’s latest business confidence survey shows that the Business Barometer index fell to 58.5 last month — almost two points below its May level. The index is measured on a scale between 0 and 100, with anything above 50 indicating that business owners expecting their performance to be stronger in the next year outnumber those expecting weaker performance.

“From these results, most small businesses appear to be remaining in defensive mode,” said Ted Mallett, CFIB’s vice president of research and chief economist. “Looking ahead to expected performance in the next three or four months, the balance of opinion barely covers the break-even mark.”

Only 23% of the 951 small- and medium-sized business owners surveyed in June said they were performing better than three or four months ago, compared to 47% who said their performance had weakened.

Business owners in the agriculture and natural resources industries were particularly pessimistic, with scores of 47.9 and 46, respectively.

Meanwhile, those in the finance, insurance and realty sector ranked among the five industries with the highest optimism, earning a score of 60.8. Health and education earned the top score, at 65.3. Business sentiment is also strong among owners in the business services sector, at 63.8.

Across the country, optimism was highest in Prince Edward Island, for which the index level was 70.6, followed by Saskatchewan, at 69.2. Business sentiment was considerably lower in Ontario, at 57.9, and Quebec, at 47.5.

In terms of employment, 19% of the respondents said they expect to add full-time staff in the next few months, while 14% expect to reduce their numbers.

Wage and price pressures remain low, with business owners expecting their prices to increase by an average of 1% in the next year, while wages are set to rise by 1.2%.

Only 30% of business owners are planning expenditures on computers or communications equipment in the next three to four months, and just half that proportion expect to spend on machinery and equipment, property or vehicles.