Small business optimism appears to be ‘stabilizing’

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This article was published 28/08/2020 (1851 days ago), so information in it may no longer be current.

Long-term optimism for pandemic recovery among small business owners in Manitoba is now back on an upward trajectory following a deep plunge last month.

Stats released Friday by the Canadian Federation of Independent Business shows an increase of about four points in their business barometer for the province — now at an index of 59.3 from last month’s 55.5, which was well below the Canadian average.

But while the glass might look half full for Manitoba now, the nationwide trend for optimism has dipped about three points to an index of 59.2 in August.

How that flip-flop of federal and provincial numbers materialized within a month has “puzzled” experts and advocates.

“It’s good news that we’re stabilizing,” says Jonathan Alward, CFIB’s director in the Prairies. “Businesses believe their 12-month prospects are much better now, but it’s quite interesting because I can’t pin-point specific reasons why this change sort of happened.”

A rise in optimism levels is “strongly correlated” with the number of COVID-19 cases within an area, said economics professor Phil Cyrenne, at the University of Winnipeg. It’s why he thinks Manitoba is doing better than other provinces — like Quebec (indexing at 43.9) and Prince Edward Island (at 47.9).

Cyrenne fears, however, the recent “spike” of cases in the province could stall Manitoba’s upward trajectory once again.

“It’s not that simple though,” said Bram Strain, president and CEO of the Business Council of Manitoba, who believes there’s several reasons why optimism remains tentative — including a new finance minister in Ottawa “stepping in during a scandal and in a pandemic.”

“Trade relations with the U.S. also come into play since we’re very much a global country with a global economy,” he said. “And with the increased uncertainty of a looming election down south and a possible one here in Canada, it’s all conditional.”

To continue increasing optimism across Canada, CFIB vice-president Laura Jones said the federal government must increase and expand measures for the Canada Emergency Commercial Rent Assistance.

“The unfairness of this program is off the charts,” she said. “Does it make sense for a drycleaner on one side of the street to survive while the one on the other side shuts down simply because one landlord was able to apply for the program and the other one wasn’t?”

As of Friday, Ontario is the only province showing a decrease in the business barometer (falling by three points to 63.1). But its numbers are still among the highest, below Nova Scotia’s top index of 68 and Alberta’s 64.3.

Manitoba optimism levels are middle of the pack, behind neighbouring Saskatchewan’s 62.9 and above British Columbia’s 58.2 index readings.

Twitter: @temurdur

Temur.Durrani@freepress.mb.ca