Small Business Confidence Falters as Fuel Costs Rise

Small business confidence fell steeply in May, reports the Canadian Federation of Independent Business (CFIB).

The long-term optimism index dropped 11.7 points to 46.3 — below the 50-point threshold.

Every province and every sector posted a decline.

“Many small firms are stuck in a grind. Demand is weak, costs are high and conditions don’t show signs of improving,” says CFIB director of economics Andreea Bourgeois. “This environment is not conducive to strong orders or investment.”

Fuel costs remained the top pressure point, cited by nearly three-quarters of small businesses. Weak consumer demand remained a leading business constraint at 53 per cent.

Average wage plans were unchanged at 2.4 per cent, while businesses expect to raise prices by an average of 3.1 per cent.

Hiring intentions remain weak and below seasonal levels — just 14 per cent of small firms are looking to hire full-time in the next few months.

“This is not the direction we’d like to see these data points go,” says Brougeois. “Higher oil prices add upward pressure on inflation, while tariffs and other economic challenges are still weighing on economic growth. With the next Bank of Canada interest rate decision only weeks away, it is a tough spot to be in.”