Given geopolitical and trade tensions and a slowing economy, it’s not surprising small businesses in Canada are worried about what’s to come.

After an upswing in July that saw the CFIB’s confidence index* rise above 50 for the first time since January (a reading above 50 means owners expecting their business’s performance to be stronger over the next 12 months outnumber those expecting weaker performance), the index retreated from 51.5 to 47.8 in August. This is far better than where things stood in March when Trump’s tariff threats seemed particularly dire and the index sunk to an all-time low. But it still points to a relatively low level of confidence.

Based on 367 responses received from August 5 to 12, the index reading came before the federal government’s decision to remove some countertariffs on U.S. goods and overlaps one day with the announcement by the Chinese government on August 12 that it would be implementing a 76% anti-dumping duty on Canadian canola seed.

When asked what factors are limiting their ability to increase sales or production, 49% of small businesses cited insufficient domestic or foreign demand. Second on the list was a shortage of skilled labour at 43%. In terms of  hiring, 70% said they expect their full-time staffing level to stay the same with 16% saying it would increase and 14% decrease.

In Alberta, the index fell from 56.4 in July to 47.8 in August—matching the national level.

The 12-month confidence index declined in every province except New Brunswick, Manitoba, and Newfoundland and Labrador. Only New Brunswick, Prince Edward Island, Quebec andManitoba remained above the 50-point threshold in August.

We can expect the confidence level to shift with the economic news and the situation on the ground for small businesses with the state of the Canada-U.S. trade relationship likely to be a key factor.

*The long-term optimism index is based on how businesses expect to be performing in 12 months. Measured on a scale between 0 and 100, an index above 50 means owners expecting their business’s performance to be stronger outnumber those expecting weaker performance. An index level near 65 normally indicates that the economy is growing at its potential. 

Answer to the previous trivia question: Jaws is considered the first summer blockbuster.

Today’s trivia question: When did the Port of Churchill officially open?