Oct. 24, 2013, Toronto – A recent survey finds that small businesses believe next year will be more profitable, with most owners investing in new equipment and upgrades.
The semi-annual BMO Small Business Confidence Report shows that business owners across Canada are more optimistic about the future than this time last year. A majority (62 per cent) said they expect 2014 will be a better year than 2013, and 55 per cent expect their business will grow. Only six per cent expect their business to shrink.
This survey produces an index score that measures the level of confidence small business owners have in the economy based on a series of key indicators: how they feel their business is currently performing, if they believe the next year will be a better/worse year for business and if they expect their business will grow/shrink next year.
Factoring in these questions, the economic outlook score for this fall was 70 – up from 63 last fall and 59 this spring.
British Columbia (74 per cent) and Alberta (73 per cent) are the most confident followed by Ontario (70 per cent), Quebec (70 per cent). Atlantic Canada was the least confident (68 per cent).
"Our semi-annual check-up is showing that business owners in Canada are in good health, and are more optimistic than before," said Steve Murphy, senior vice-president of commercial banking at BMO Bank of Montreal, in a news release. "Particularly noteworthy is the fact that the outlook for business next year is consistent across the country, so entrepreneurs are feeling supported and encouraged regardless of where they're located."
The majority of business owners in all parts of the country share this positive outlook, with those in B.C. (66 per cent) and Ontario (65 per cent) recording the highest score. Atlantic Canada (59 per cent) and Alberta (58 per cent) scored had the least positive outlook for 2014. The overall belief that 2014 will be better for business was 62 per cent across the country.
The number of businesses that expect their company to grow next year is nearly 10 times that of those who expect to see their company shrink (55 per cent to six per cent). Ontario businesses (51 per cent) thought their businesses would grow the least in 2014 with Alberta (60 per cent) as the most confident.
"The positive outlook among businesses for 2014 is consistent with our forecast for accelerating growth as we move into next year," said Benjamin Reitzes, senior economist in BMO Capital Markets, in a news release. "An improving U.S. and global economic backdrop is expected to provide a lift to Canadian businesses and the economy as a whole."
One-third of small businesses plan to invest in their business. Upgrading equipment represents the most common type of investment (76 per cent), followed by: hiring more employees (46 per cent), upgrading technology and systems (45 per cent), training employees (45 per cent) and lowering overhead costs by transitioning to a mobile workforce (16 per cent).
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