Small Business Confidence Across Canada Slumps to 5-Month Low Amid Virus Resurgence
As a second, more severe coronavirus wave threatens the Canadian economy, small businesses across the country are once again bracing for the worst.
As governments look to bring back previously lifted restrictions and closures to contain the virus, Canada’s economy may be heading for a dark fourth quarter. The Canadian Federation of Independent Business (CFIB) index, which monitors small business sentiment across Canada, declined by nearly 6 points to 53.3 in October. This is the lowest level recorded in over five months, and the largest drop since Canada’s economy went into lockdown back in March.
The grim reading for October corresponds to the sudden spike in coronavirus cases, which have begun to alarm health officials across the country. Some regions of Canada have reintroduced restrictions on hospitality and restaurant sectors, as well as businesses that pose a higher risk of potential infection. As a result, optimism among small and medium-sized businesses across decreased in 7 out of 10 provinces, with the largest declines occurring in New Brunswick, Ontario, and Alberta. Likewise, dwindling sentiment was also noted across several key industries, including transportation and health and eduction services.
The CFIB report also noted that the month of October saw many businesses operate below 71% capacity, which has remained unchanged since August. Meanwhile, 28% of businesses across Canada said they plan to reduce their full-time staff within the next three months, while only 12% said they would boost their full-time workforce. Following what was a positive rebound over the summer supported by the lifting of restrictions, the fourth quarter will likely not continue to heed similar results.
Information for this briefing was found via the CFIB. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.