BC Small Business Optimism Slips
Prince George, B.C.- According to the latest monthly Business Barometer survey results from the Canadian Federation of Independent Business (CFIB), BC’s small business optimism decreased 0.8 points in August to 65.6.
Despite the decline, BC remains second among the most optimistic entrepreneurs across the country, behind just PEI (70.5).
An index level over 50 ( with 100 being the top), indicates a business owner expects their company’s performance to be stronger in the next year. According to the CRIB an index marker between 65 and 75 means the economy is growing at its potential.
“British Columbia has seen a slight softening of business optimism over the past couple of months,” said Aaron Aerts, BC economist. “However, it still remains at a healthy level, with a majority of small businesses planning to expand over the coming year. And nearly half of entrepreneurs currently believe their business is in good shape, compared to just nine per cent who consider it as poor.”
The report says BC small businesses still intend to ramp up hiring, but intentions have softened slightly. In August, 26% plan to increase full-time staff in the next three months, the same as in July. In comparison, 11 per cent are looking to cut back, up two points from July.
Forty-seven per cent of entrepreneurs in August believe the general state of health of their business is good, up a point since July. That compares to just 9 per cent of BC small businesses who describe their business’ health as poor, down a point from July.
The Consumer Confidence Index is the strongest indicator of our economic future, yet is seldom reported on. Instead everything seems to be business focused, which is not where the demand is in demand and supply economies.
That’s true enough, but it’s business, (and government), ‘capital’ spending that provides the means of making consumer demand effective. It shouldn’t be that way, but if the economy as a whole is not, (as it is not), fully financially self-liquidating, (incomes, in total, distributed over any given period can not fully meet total costs incurred in that SAME given period as they’re appearing in prices at the point of final retail), then capital spending bridges the gap. (By pushing it into the future, when it’ll come back to haunt us much enlarged.) And so business confidence is important, so long as things are as they are financially.
The Consumer Confidence Index is just one indicator of economic activity/sentiment. This report by the CFIB speaks to another, the monthly Business Barometer survey.
You suggest that everything seems to be business focused but I suspect that comment comes from your well illustrated distain for practically everything that has anything to do with “business”.
I question how you can say that everything seems to be business focused when in fact manufacturers, retailers, banks and government all monitor changes in the Consumer Confidence Index in order to factor in the data in their decision-making processes. In the United States, the Conference Board’s consumer confidence index is the most widely accepted index among the United States media, businesspeople, and many consumers.
Are business owners supposed to ignore all available indexes and focus on just the Consumer Confidence Index, or should they avail themselves of all indexes?
Most businesses, I suspect, will find these various indexes about as useful as most of us would find the daily weather forecast.
What really determines whether we’ll have economic boom or gloom is overall business profitability. For it’s from business profits that past business loans are amortised, and credit is kept available for needed future ones.
The ‘fly in the ointment’ lies in the fact that a great deal of business spending on more efficient ‘capital’ projects, while distributing incomes in the present that are needed to recover the costs of the past, push MORE costs into the future than there are going to be future incomes to meet them.
This is because the ‘efficiency’ sought after displaces labour and labour incomes to a greater degree, in total, than those who are left working are going to earn in additional incomes, in total. While what they DO earn will increasingly be taxed away to keep the displaced. Much needless social discord will be the end result.
The only answer is to look at the accounting itself, and how it applies BEYOND the individual business, and in regards to the economy as a whole.
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