MNI DATA REACT: Canada Smallbiz Sentiment Near Pre-Covid Level

By Greg Quinn

     OTTAWA (MNI) - Canadian small business confidence climbed back to near

where it was in the months before the Covid-19 pandemic on optimism that health

shutdowns are being relaxed, an industry group's flash survey showed Thursday.

     The Canadian Federation of Independent Business index rose 7 points to 53.2

in biweekly polling done May 5-6. The group's Barometer averaged 57.1 in the

three months before the shutdowns took hold in March, when it plunged to a

multi-decade low of 30.8.

     "The prospect of restrictions loosening in some parts of the country is

bringing some hope, but many are still considering layoffs and holding off on

investments," Ted Mallett, CFIB's chief economist, wrote in the report.

"Insufficient domestic demand remains the biggest factor limiting sales amid the

pandemic." 

     The gains were broad based across industries and regions, while the overall

reading is well short of the level of 65 consistent with an economy at

potential. The comparison with the start of this year is also flattering because

that was a time when growth had almost stalled on weak exports and worries about

indebted consumers.

     Half of owners in the latest survey said business conditions were bad, and

firms are still using just 44% of their production capacity, CFIB's report said.

     Other highlights: 

     - Some 58% said unfilled orders are below normal

- 67% have no plans for capital spending

- Average wage increases over next year seen at 0.6%

- The share of firms planning full-time layoffs fell to 39% from a peak of 63% a

month ago.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

[TOPICS: MACDS$,M$C$$$]