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October 2024 Business Barometer: Challenges for Small Businesses

Toronto, October 31, 2024 – Recent findings from the October 2024 Monthly Business Barometer® conducted by the Canadian Federation of Independent Business (CFIB) reveal a concerning trend for small business owners across the nation. Over half (53%) of small businesses reported that insufficient demand is hampering their sales or production growth. This figure has been steadily rising for more than two years and significantly exceeds the historical average of 37%.

A Stark Reminder of Economic Challenges

Simon Gaudreault, the CFIB’s chief economist and vice-president of research, expressed alarm at the current economic climate. “Today feels a bit scary, and not just because it’s Halloween. The last time we saw such a high percentage of businesses struggling with weak demand was in April 2020,” he noted. This comparison underscores the gravity of the current situation. Despite the Bank of Canada taking steps to cut interest rates, there have not yet been signs of immediate consumer spending increases akin to a “sugar rush,” as businesses enter a critical holiday shopping season where many are banking on increased sales to make up for a tough year so far.

Wage and Price Increases in Focus

Small businesses are also facing rising costs. The average planned wage increase has reached 2.7%, while price increase expectations stand at 2.5% this month. These figures highlight ongoing pressures that small businesses are experiencing, likely exacerbated by the present economic conditions.

Sector-Specific Optimism

In terms of long-term confidence, the small business confidence index remains flat at 55.8 for October. When broken down by sector, agriculture (43.5%) and hospitality (51.7%) exhibited the lowest levels of optimism. However, businesses in the retail sector have shown relative stability, with a confidence level of 54.6 for the upcoming year. This sector’s steadiness may provide a glimmer of hope amidst the uncertainties faced by others.

Rising Costs Still a Concern

A significant number of small businesses continue to report higher costs as a considerable barrier to growth, with 71% citing wage pressures, 70% facing insurance costs, and 69% experiencing hurdles due to taxes and regulations. Conversely, it is worth noting that the percentage of firms reporting challenges with borrowing costs has been declining, now at 36% in October, down from 43% the previous month.

Andreea Bourgeois, the Director of Economics at CFIB, remarked, “It’s nice to see a significant drop in the share of businesses struggling with borrowing costs. While many spooky challenges remain on the costs and demand sides, the Bank’s rate cuts have at least started making financing a bit more accessible.” This sentiment reflects a cautious optimism about easing finance-related pressures, yet it underscores the persistent challenges that other cost factors pose.

How AI legalese decoder Can Help

In this landscape of economic unease, where small businesses are grappling with high operational costs and declining demand, tools such as AI legalese decoder can serve as invaluable resources. This technology helps business owners decode complex legal jargon in contracts, regulations, and compliance documents. By simplifying legal language, the AI legalese decoder allows small business owners to better understand their obligations and rights, potentially reducing compliance costs and empowering them to make informed financial decisions.

Furthermore, as businesses navigate these turbulent times, they can leverage AI legalese decoder to identify clauses that may impose significant financial burdens, such as lease conditions or insurance terms. With this newfound understanding, small business owners can negotiate more favorable agreements and appeal to stakeholders and partners more effectively.

Contact Information for Media Inquiries

For media inquiries or interviews, please contact:

Dariya Baiguzhiyeva, CFIB
647-464-2814
[email protected]

Methodology Behind the Barometer Findings

The insights presented in the October Business Barometer® were derived from 516 responses gathered from a stratified random sample of CFIB members through a controlled-access web survey. Data collection spanned from October 2 to October 22, and the findings are statistically accurate to +/- 4.3 percent, 19 times out of 20. Each month, all indicators are recalibrated to reflect the most current responses received.

About CFIB

The Canadian Federation of Independent Business (CFIB) is the leading association representing small and medium-sized businesses in Canada, boasting 97,000 members from every industry and region. CFIB is dedicated to enhancing the success of business owners by advocating for policy changes across all levels of government, providing expert advice and tools, and negotiating exclusive savings. To learn more, visit cfib.ca.

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