Canadian Economics

October 6, 2010

Canada CFIB Business Barometer – Grind Down Continues

CANADA – CFIB BUSINESS BAROMETER 63.6 Sep vs 64.9 Aug

Small Businesses Point To Slower Growth. The CFIB Business Barometer index of small business
optimism fell for the fifth time in six months in Sep, and stands at the lowest level this year. The Sep level
is consistent with about 1.5% real GDP growth according to our calculations; the Q3 level is consistent with
about 2% real GDP growth.

Broad Based Slowing. 8 of 13 industries posted slower growth. Construction was of notable weakness,
likely a reflection of the housing slowdown. The Construction index fell to 51.6, just above the breakeven
50 line and the lowest level since Mar 2009.

6 of 10 provinces posted slower growth. Important Ontario posted the biggest monthly drop and
underperformed every other province, printing below the 60 mark for the first time since June 2009.

Investment, Jobs Pause. CFIB noted, “…business capital investment plans are moving sideways and
employment plans have shifted to the negative.”

CFIB Business Barometer Index

75

70

65

60
Sep
55

50

45

40

35
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Sources: CFIB, Credit Suisse
 CFIB Business Barometer index (left) Canada Real GDP (QoQ%, right)
85 10
80 8
75 6
70 4
65 2
60 0
55 Q3 avg -2
50 -4
45 -6
40 -8
35 -10
Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09

Sources: Canadian Federation of Independent Business, Credit Suisse

 CFIB Business Barometer - Industries, September 2010

Health & education serv. 71.2

Wholesale 69.4
Prof., business services 65.7
Arts, recreation, info. 65.0
Manufacturing 64.7
Retail 64.7
Transportation 64.7
CANADA 63.6
Other services 60.8
Finance, insur. realty 60.3
Natural resources 56.4
Agriculture 56.3
Hospitality 56.1
Construction 51.6

0 50 100
Sources: CFIB, Credit Suisse
 CFIB Business Barometer - Provinces, September 2010

Newfoundland & Lab. 69.1

New Brunswick 67.0

Quebec 66.3

Nova Scotia 65.9

Alberta 65.7

Saskatchewan 65.2

British Columbia 63.6

CANADA 63.6

Prince Edward Is. 60.3

Manitoba 60.0

Ontario 59.6

0 50 100
Sources: CFIB, Credit Suisse

Jonathan Basile
Vice President, Economics
jonathan.basile@credit-suisse.com
(212) 538-1436

CREDIT SUISSE SECURITIES (USA) LLC

Eleven Madison Avenue
New York, NY 10010-3629
www.credit-suisse.com

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