B.C. small business owners are losing their confidence in seeing success in this province, amid inflation and labour shortages, an August report by the the Canadian Federation of Independent Business suggests.
The latest Business Barometer report details a 46 per cent short-term index and forecasts a weakened business performance over the next three months, with the 12-month outlook is at its lowest level of 50 per cent since June 2020.
Both indexes are 23 per centage points below their 2010-2019 average, which reflects the challenging economic conditions small businesses are facing in B.C.
“Small business owners continue to feel the pressures of higher costs and labour shortages, and they’re taking a wait-and-see approach,” said Simon Gaudreault, chief economist and vice president of research at CFIB. “They are cautious about the future, which impacts confidence, hiring plans and business growth plans.”
According to the federation, skilled and semi-or unskilled labour shortages continue to be the top factors limiting business growth in the province. In addition, fuel and energy costs, as well as wages, have remained the top cost constraints for 71 per cent of B.C. small businesses, alongside taxes and regulations.
The share of B.C. businesses reporting being in bad shape increased by three per cent between July and Aug. (20 to 23 per cent). Hiring plans have decreased significantly since May as the number of firms planning on laying off staff reported is almost doubled with an increase of ten per cent (11 to 21 per cent).
“The fact that both short-term and long-term business optimism in the province is 23 per cent below the 2010-2019 average should sound the alarm for all levels of governments to provide cost relief to small businesses”, said Jairo Yunis, senior policy analyst for B.C.
“For example, the B.C. government can help businesses by refunding WorkSafeBC’s $3.4 billion surplus, providing fuel cost relief, and reducing payroll costs.”