Confidence rises among Canadian business owners

By National Underwriter

National Underwriter

By Warren S. Hersch

Business owners across Canada are more optimistic about the future than this time last year, according to a new report.

BMO Financial Group discloses this finding in its semi-annual “BMO Small Business Confidence Report.” Launched last fall, the report produces an index score that measures the level of confidence small business owners have in the economy based on a series of key indicators, including 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 was 70, up from 63 last fall and 59 this spring.

A majority of the survey respondents (62 percent) say they expect 2014 will be a better year than 2013, and 55 percent expect their business will grow. Only 6 percent expect their business to shrink.

Business Confidence Index Score Fall 2013706870707374
Business Confidence Index Score Fall 2012636561636661

"As we lead up to Small Business Week, the well-being of our small business customers is top of mind,” says Steve Murphy, senior vice president, commercial banking, BMO Bank of Montreal. "Our semi-annual check-up is showing that business owners in Canada are in good health, and are more optimistic than before. 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 British Columbia and Ontario recording the highest score.

Believe 2014 will be better for business62%59%60%65%58%66%
Believe 2014 will be worse for business10%16%8%11%6%6%

Prospects for growth

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, the report shows.

Expect business to grow in 201455% 55%58%51% 60%58%
Expect business to shrink in 20146%6%4%8%6%>1%

"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, BMO Capital Markets. "An improving U.S. and global economic backdrop is expected to provide a lift to Canadian businesses and the economy as a whole."

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