Sentiment among small businessowners appears to be on the rise, a new report indicates.
According to the Canadian Federation of Independent Business, small business confidence rose to a mark of 66 in its Business Barometer report in February, the sixth straight time in which businessowner confidence has increased from the previous period. Any score above 50 indicates more businesses believe their economic performance will improve over the course of the year. Scores below that figure suggest owners think conditions will deteriorate.
Ted Mallet, chief economist and vice president for the CFIB, noted the sense of optimism was particularly strong among businessowners in Eastern Canada.
"Small businesses saw a little more sunshine in February," said Mallet. "Better conditions in Ontario and the Maritimes, that were once held back by European and U.S. economic worries, appear to be driving the gains in sentiment."
However, Western Canada business managers were the most positive, posting business confidence scores of 72.3 in Alberta and 70.1 in Saskatchewan.
Rising confidence levels were not universal, as optimism weakened in the construction and manufacturing sectors, the report noted. However, this was offset by significant gains in retail and hospitality, largely resulting from consumers increasing their buying behaviour. The natural resources industry and business services sector demonstrated the highest levels of optimism. The construction sector may be poised for a quick turnaround, as a recent report from the Construction Sector Council suggested home building and electrical utility sectors will reach record high employment levels over the next 10 years.
In addition, Malett noted that even among sectors where optimism declined, it wasn't by much.
"Overall, there is a very little gap between the most- and the least-optimistic business owners, by sector," he said. "[This] is a welcome sign of general economic stability."
The improving confidence reflects the improvement in conditions many business owners expected this year. A poll last fall from BMO Bank of Montreal found the majority of businesses thought 2012 would be more productive than 2011.
This is also reflected in recent hiring trends. According to Statistics Canada's most recent labour force survey, the unemployment rate dipped two-tenths of a percent last month to 7.4 per cent, adding 121,000 jobs compared with the same month in 2011.
While there were some declines in employment in certain industries - such as retail, wholesale trade, transportation and warehousing - these were offset by higher staff levels in finance, insurance, real estate, educational services, business and support services, the report noted.
There was also some disparity in the employment rate of various age groups. For example, among youths between 15 and 24 years of age, employment diminished, while it increased for people 55 and above. Employment was stable for 25 to 54-year olds.
The labour force survey also detailed how employment fared in specific provinces. Employment diminished in New Brunswick as 2,600 jobs were cut from payrolls, pushing the province's unemployment rate to a national high of 10.1 per cent. Meanwhile, employment largely remained unchanged in the majority of other provinces, as Ontario, Quebec and Alberta all posted job numbers that showed little variation when contrasted with January. Alberta boasts the lowest unemployment rate in the country at just 5 per cent, Statistics Canada noted.