Canada’s CFIB small business barometer index rises in November, but trend remains flat at low level

Canada’s CFIB’s Business Barometer index was up in November. The index has been showing slight improvement since April. The index rose 1.7 points to 59.4 in November. However, the sentiment reading is averaging just 59 points. The trend continues to be flat.

Region wise, the performance came in mixed, with sentiment increasing in half of the provinces. The best and worst performing rankings stayed the same, noted TD Economics. Prince Edward Island, Nova Scotia, British Columbia and Quebec continued to lead the way in November, recording a reading of 71.4, 64.9, 69 and 63.8, respectively. Meanwhile, Newfoundland and Labrador, Saskatchewan and Alberta continued to be at the bottom with the sentiment reading falling in all the three regions.

Sector wise, sentiment reading rose in seven sectors, whereas it dropped in five and stayed unchanged in one. The level of sentiment in hospitality and tourism led the way in November, rising to 64.6, followed by professional and financial services. Meanwhile, construction and natural resources recorded the lowest level of sentiment, with construction moving into contraction territory.

The share of owners stating that their business remains in good shape stayed stable at almost 38 percent; however, this is slightly low compared to earlier years. Investment plans and employment recorded certain improvement in November; however, they stayed subdued, said TD Economics.

The improvement in November’s reading, even though its encouraging does not help much. The confidence reading has stayed flat at quite a low level for the last eight months. Moreover, subdued employment and investment plans imply that businesses stay wary. Small and medium sized enterprises employed more than 90 percent of the private sector workforce in 2015. The recent weakness in employment plans continues to be in line with a moderate pace of hiring going forward.

“Policy uncertainty in the aftermath of the U.S. presidential election could weigh on the confidence measure going forward”, stated TD Economics.

At 05:09 GMT, the USD/CAD pair is trading at 1.3492. Meanwhile, at 05:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -10.576, while the FxWirePro's Hourly Strength Index of USD was slightly bullish at 53.9769. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex