Optimism among small and medium-sized enterprises (SMEs) was steady but soft in October, according to the Canadian Federation of Independent Business (CFIB) Monthly Business Barometer. Nationwide, the long-term, 12-month index increased by 0.7 points to 55.8, while the short-term index declined by 1.9 points to 48.3, now below the 50-point benchmark. Businesses are struggling with insufficient domestic and foreign demand—the main limitation to sales growth—along with skilled labour shortages, despite a rising unemployment rate.
B.C. patterns were consistent with the national short-term and long-term pictures. The province’s short-term index fell by 0.4 points to 48.1 in October, while the long-term, 12-month index increased by 1.8 points to 56.5. Both indices have held steady in recent months, as optimism remained dampened by a slowing economy. B.C. also observed a tight provincial election in October which may have also contributed to the subdued optimism. Twenty-five per cent of B.C. SMEs considered themselves to be in a good state of business health, down from 28 per cent in September. Plans to increase full-time staff remained the same month to month.
Going forward, businesses face a mixed environment. Although falling interest rates have made financing more available to businesses, consumers are still restricting their spending. The return to a U.S. administration under Donald Trump almost guarantees tariffs on exports to the U.S. (and retaliation) which will have a severe impact on Canadian trade, businesses and the national economy through demand and inflation channels.
Meanwhile, the latest Survey of Employers, Payroll and Hours (SEPH) showed very minor change in employment positions held in B.C. in August. Total payroll counts in the province increased by 0.1 per cent following a similar decline in July. This translated to a gain of 1,930 positions and brought total payroll employment to 2.56 million jobs. Goods-producing industries reported just 52 fewer positions, while services-producing industry payrolls increased by 3,780 positions (up 0.2 per cent).
The job vacancy rate remained at 3.6 per cent in August and for the third consecutive month, moving total vacancies to nearly 89,800 during the month. The job vacancy rate has remained low since the second half of 2023, highlighting weaker hiring by businesses as the economy slows.
Payroll counts in goods-producing industries were relatively unchanged. Within this category, the mining, quarrying, and oil and gas extraction sector and the construction sector both saw growth of 0.4 per cent (up 108 positions) and 0.1 per cent (up 268 positions), respectively. The utilities sector also recorded a 0.1-per-cent gain (up 17 positions).
In services, payroll counts rose due to gains in education services, which increased by 1.7 per cent (up 3,150 positions). Public administration also saw growth, rising by 0.7 per cent (up 1,203 positions). Increases were also seen in health care and social assistance, and trade. Conversely, declines were noted in professional, scientific and technical services, which dropped by 0.6 per cent (down 1,080 positions), and in transportation and warehousing, which decreased by 0.3 per cent (down 453 positions).
On the wage front, seasonally adjusted average weekly earnings in B.C. went up 0.1 per cent to $1,281.73.
Bryan Yu is chief economist at Central 1.
