Business Barometer®: Small Business Confidence Improves in May

Business Barometer®: Small business confidence improves in May
 Courtesy Canadian Federation of Independent Business

Courtesy Canadian Federation of Independent Business

The 12-month small business confidence index has jumped 8.8 points reaching 56.4 in May, according to the latest Canadian Federation of Independent Business (CFIB) Business Barometer®. After the abysmal levels seen earlier this year, confidence is back to more seasonal levels and on par with the reading recorded one year ago in May 2023 (56.1). 

Canada’s long-term confidence is driven mostly by Ontario’s significant gain in optimism, (+9.1 points to 58.1). The most notable changes are in the retail and transportation sectors; both have registered sizeable improvements of 4.9 and 4.7 points.

“Small businesses are overall feeling cautiously positive heading into the summer. Now that all the governments have tabled their budgets, business owners at least have some idea as to what to expect in the coming months. Their increased optimism could also be partly explained by much-anticipated interest rate cuts in June and the cooling labour market,” said Andreea Bourgeois, CFIB’s director of economics. “While some indicators of cost pressure and limitations on growth are still way above their historical averages, it’s still reassuring to see overall improvements in the small business sentiment.”

The average price and wage plan increases stabilized in May, with both indicators sitting at 2.8%. The average price increase indicator shaved off the 0.5 points gained in April and is almost on par with the March level (2.7%).

This month’s Business Barometer suggests that the labour market pressures are easing, with 45% of businesses reporting a shortage of skilled labour, down from 47% last month. Full-time and part-time hiring plans remain timid in May, but stronger than earlier in the year.

“While historically more businesses plan to hire ahead of the busy summer season, this year those hiring plans are more cautious but at least firms are not looking to lay off either,” Bourgeois added.

On the other hand, more businesses (68%) reported struggling with high tax and regulatory costs. The share of businesses indicating high insurance costs has come slightly down to 68% after peaking at 72% in April, but it still remains much higher than its historical average of 49%. 

The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at

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