Small business confidence is trending in the right direction but at a snail’s pace, finds the July Business Barometer by the Canadian Federation of Independent Business (CFIB), which was released on Thursday.
Long-term small business confidence index has reached 50.9 points in July, just slightly above the breakeven point of 50. This indicator has not hit its historical average since June 2022, said Canada’s largest association of small and medium-sized businesses with 100,000 members across every industry and region.
Simon Gaudreault
“The economy is stabilizing in some ways, and the direction we’re heading in is more encouraging. We’re not in the worst spot compared to previous months, but there’s still not a lot of optimism out there,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research.
“Although there’s a lot of uncertainty caused by the U.S. administration, many announcements have not materialized in effective tariffs yet and it seems many business owners have started adjusting to the new trade reality, which might explain why they’ve regained some optimism.”
The CFIB said inflation pressures are easing, with small businesses looking to increase prices and wages by an average of 2.7% and 2.1%, respectively. Over two-thirds (68%) of small firms cite struggling with tax and regulatory costs, while weak demand remains the top barriers to growth for over half (54%) of businesses.
While hiring intentions during the summer season are historically strong, more businesses were looking to lay off staff (16% in July vs. 13% in June). Only 12% of firms were planning to hire compared to 15% in June, added the national organization.
Andreea Bourgeois
“Business owners tell us they’re dealing with trade and economic uncertainty, increased costs, and difficulty keeping up with taxes and regulations. Having long-term clarity would mean a great deal to small businesses right now,” said Andreea Bourgeois, CFIB director of economics.
CFIB’s Main Street Quarterly economic forecast will be released on July 24.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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