Canada’s small business confidence stabilizes in October, CFIB sentiment index to 57.2

Canada’s small business confidence stabilized in October with the CFIB sentiment reading rising 0.3 points to 57.2. In spite of the gain recorded this month, the index level is still around 9 points below the May cyclical peak.

Region wise, Quebec, British Columbia and Nova Scotia led the way, in spite of Nova Scotia and Quebec losing some ground on the month. In the meantime, the lowest levels of optimism were seen in Newfoundland and Labrador and Saskatchewan, with readings for the remaining provinces hovering around the 55-point mark.

Sector-wise, the sentiment reading contributed to improve in natural resources and retail, while also rising in agriculture, which marked its first rise in six months. Sentiment continued to fall in all segments; however, professional and business services and wholesale managed to retain their edge as the most optimistic sectors. Other indicators show mixed results.

The level of confidence continues to be subdued on a trend basis, in line with a slowdown in growth in the second half of 2017, noted TD Economics in a research report.

The declining trend in small business confidence seems to have been driven primarily by pullbacks amongst the forward-looking indicators, with current business conditions continuing to be still largely sanguine. The latter is in line with expectations for a still-decent rate of growth of about 2 percent annualized for the second half of the year. However, the prolonged gully in optimism seems to have taken a toll on investment and employment pans, with these trends likely to be a drag on economic activity, stated TD Economics.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Euro was bearish at -76.2267, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 131.28. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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