MNI: Canada June Small Business Mood Rises After Tariff Slump

Canadian small business confidence climbed for a third month in June after reaching historical lows on the threat of a U.S. trade war, in line with the central bank's view sentiment is low but not heading for a disaster scenario as officials weigh more interest-rate cuts.

The Canadian Federation of Independent Business 12-month outlook index rose to 47.3 from 40.1 in May and a low of 25.5 set in March. Prospects for the next three months showed a similar trend. The survey was taken June 3-9 and the 412 responses is a bigger base than the BOC's own quarterly survey of about 100 firms. 

"Optimism among all SMEs remains quite low" and the index is below the level of 50 considered a balanced economic outlook, according to the report published Thursday. 

Bank of Canada Governor Tiff Macklem at a press conference Wednesday made similar comments about low overall sentiment. In an earlier speech, he also reiterated that after holding the key rate at 2.75% for a second meeting on June 4 a cut may be needed if the economy weakens further and inflation remains stable. The commitment this week between U.S. President Donald Trump and Canadian PM Mark Carney to reach a trade deal within 30 days will also be important ahead of the Bank's next decision July 30, Macklem said.

The CFIB report showed the expected average price increase over the next 12 months was unchanged at 2.9% and the average expected wage increase remained at 2.2%."Full-time staffing plans remain muted with no real appetite for hiring" the report said. (See: MNI INTERVIEW:BOC Still On Cut Path As GDP Falters- Ex Adviser)