The outlook remains bright for Canadian small- and medium-sized businesses in 2007
globeandmail.com : Small Business:
Outlook remains bright
Canadian Press
Toronto
The outlook remains bright for Canadian small- and medium-sized businesses in 2007, say two separate economic reports released Wednesday.
The first, a Scotiabank survey, suggests that small-business owners in B.C. are the most optimistic about the Canadian economy, with 38 per cent saying it will improve over the next year.
Nationally, about 28 per cent said they believe general economic conditions will see a boost in the next 12 months. But Canada seems to be on an optimism upswing.
Last year, fewer small business owners said they expected the national economy to deteriorate, dropping to 23 per cent from 45 per cent of those surveyed a year ago.
Nearly half of respondents said the economic climate would likely stay the same.
"Small-business owners have indicated their optimism about Canada's prospects in the year ahead and that will go a long way toward reinforcing the economy's forward momentum," said Scotiabank deputy chief economist Aron Gampel.
In Western Canada, many small companies are benefiting from work they do for the booming energy sector, especially the natural gas industry in northeastern British Columbia and the oilsands of northeastern Alberta. High metal prices have also spurred growth in mining companies across Canada.
Heading eastward from B.C. and Alberta, some provinces are a little more pessimistic. In Quebec and Atlantic Canada, only 22 per cent of those surveyed predict a bright immediate future for businesses.
Even if not everyone is boasting about Canada's growth potential over the next year, about 46 per cent believe their own businesses will see increased growth during the period.
Another 47 per cent expect their business's results will stay the same, with the remaining seven per cent predicting lower results. Those numbers were equivalent to last year's responses.
A second study by TD Bank's economics department also suggested Wednesday that prospects remain positive for small- and medium-sized enterprises.
The study found that despite the deteriorating outlook for the U.S. economy, the Canadian small business sector is poised for continued growth. That's because most businesses of that size don't engage in as much international trade as larger firms and will likely be insulated from the U.S. slowdown.
A small business is one that employs less than 100 workers, while a medium-sized business employs between 100 to 500, the report said.
"Most SMEs (small and medium sized enterprises) are concentrated on the domestic economy with particularly large footprints in health care, construction, and consumer and business services," said senior economist Derek Burleton, who co-authored the report.
"The good news is that these domestic areas of Canada's economy should hold up well over the next few years, supported by a strong labour market, an increase in government spending, relatively low lending rates, and cuts to small business income tax rates implemented by severalprovincial governments."
The TD report, however, warns of "regional variations in conditions" facing SMEs, noting that central Canadian businesses are more closely tied to the country's beleaguered manufacturing sector than their counterparts in Western Canada.
Meanwhile, Scotiabank's annual review of small businesses asks owners about their concerns and priorities for the year ahead, as well as possible trends.
Respondents most frequently mentioned concerns with the financial, government, labour and competition issued, the bank said.
Financial issues, like taxes, fuel prices, and interest rates were named as major issues by 60 per cent of those polled.
The survey results are considered accurate within 4.2 percentage points, 19 times out of 20.
TNS Canadian Facts conducted the survey using the firm's online financial panel. E-mail invitations were sent to 3,158 members of the panel, made up of more than 32,000 Canadian Internet users who have agreed to participate in survey research from time to time.
In total, 573 on-line interviews were completed between Aug. 17 and Aug. 31, a completion rate of 18 per cent. Small business owners were defined as those who were an owner or a partner in a business with annual revenues under $5 million.
They also had to derive their primary source of income from the business and be involved with the business on a full-time basis. Final data were weighted by region and business revenue to reflect the small-business population in Canada.
Outlook remains bright
Canadian Press
Toronto
The outlook remains bright for Canadian small- and medium-sized businesses in 2007, say two separate economic reports released Wednesday.
The first, a Scotiabank survey, suggests that small-business owners in B.C. are the most optimistic about the Canadian economy, with 38 per cent saying it will improve over the next year.
Nationally, about 28 per cent said they believe general economic conditions will see a boost in the next 12 months. But Canada seems to be on an optimism upswing.
Last year, fewer small business owners said they expected the national economy to deteriorate, dropping to 23 per cent from 45 per cent of those surveyed a year ago.
Nearly half of respondents said the economic climate would likely stay the same.
"Small-business owners have indicated their optimism about Canada's prospects in the year ahead and that will go a long way toward reinforcing the economy's forward momentum," said Scotiabank deputy chief economist Aron Gampel.
In Western Canada, many small companies are benefiting from work they do for the booming energy sector, especially the natural gas industry in northeastern British Columbia and the oilsands of northeastern Alberta. High metal prices have also spurred growth in mining companies across Canada.
Heading eastward from B.C. and Alberta, some provinces are a little more pessimistic. In Quebec and Atlantic Canada, only 22 per cent of those surveyed predict a bright immediate future for businesses.
Even if not everyone is boasting about Canada's growth potential over the next year, about 46 per cent believe their own businesses will see increased growth during the period.
Another 47 per cent expect their business's results will stay the same, with the remaining seven per cent predicting lower results. Those numbers were equivalent to last year's responses.
A second study by TD Bank's economics department also suggested Wednesday that prospects remain positive for small- and medium-sized enterprises.
The study found that despite the deteriorating outlook for the U.S. economy, the Canadian small business sector is poised for continued growth. That's because most businesses of that size don't engage in as much international trade as larger firms and will likely be insulated from the U.S. slowdown.
A small business is one that employs less than 100 workers, while a medium-sized business employs between 100 to 500, the report said.
"Most SMEs (small and medium sized enterprises) are concentrated on the domestic economy with particularly large footprints in health care, construction, and consumer and business services," said senior economist Derek Burleton, who co-authored the report.
"The good news is that these domestic areas of Canada's economy should hold up well over the next few years, supported by a strong labour market, an increase in government spending, relatively low lending rates, and cuts to small business income tax rates implemented by severalprovincial governments."
The TD report, however, warns of "regional variations in conditions" facing SMEs, noting that central Canadian businesses are more closely tied to the country's beleaguered manufacturing sector than their counterparts in Western Canada.
Meanwhile, Scotiabank's annual review of small businesses asks owners about their concerns and priorities for the year ahead, as well as possible trends.
Respondents most frequently mentioned concerns with the financial, government, labour and competition issued, the bank said.
Financial issues, like taxes, fuel prices, and interest rates were named as major issues by 60 per cent of those polled.
The survey results are considered accurate within 4.2 percentage points, 19 times out of 20.
TNS Canadian Facts conducted the survey using the firm's online financial panel. E-mail invitations were sent to 3,158 members of the panel, made up of more than 32,000 Canadian Internet users who have agreed to participate in survey research from time to time.
In total, 573 on-line interviews were completed between Aug. 17 and Aug. 31, a completion rate of 18 per cent. Small business owners were defined as those who were an owner or a partner in a business with annual revenues under $5 million.
They also had to derive their primary source of income from the business and be involved with the business on a full-time basis. Final data were weighted by region and business revenue to reflect the small-business population in Canada.
posted by Daryl at 11:28 PM
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