Small businesses weather economic jitters at home and abroad
By Sara Bedal | December 7, 2010
The Canadian economy has slowly been gaining ground, but almost half of small business owners believe they're losing ground, according to a recent survey. And charitable organizations are likely to feel their restraint.
In the quarterly American Express Small Business Monitor, 47 per cent of small business owners across Canada reported either a "slight" or "significant" downturn to their business, a number that has climbed five points since August and 10 points since May. Correspondingly, those reporting an improvement to their business dropped eight points during the same period.
The survey also found that 40 per cent of respondents have not given anything to charitable groups or community activities in the past year. Among those, almost half (46 per cent) cited budget as the reason.
Still, small business owners are a cautiously optimistic lot. The American Express Small Business Index, which measures and assigns a letter grade to the confidence, performance and attitudes of Canadian small business owners, was unchanged in the latest quarter, at 64 per cent or "C."
As well, when asked about the future:
- Three-in-five respondents believe the economic situation will improve next year;
- More than two-thirds expect to take on more business next year; and
- Four out of five say that the benefits of being a small business owner outweighs the risks, the highest level seen since the Amex SBS Monitor began.
It's not just Canadian small business owners who are hopeful about the economy.
A survey of more than 1,750 small and medium sized enterprises in China, Italy, Singapore, South Africa, the UK — and Canada — found that most of them believe the worst of the recession is over. However, a disturbingly high number of respondents — between 31 per cent and 54 per cent in each country — feel they do not have adequate cash reserves to survive another financial crisis, according to the Forbes Insight study.
For what it's worth, they may want to take comfort in the recent prediction that global economies are likely to avoid a double-dip recession.
"Global economic activity has decelerated in recent months, with next year's growth in North America, Europe and Japan likely to fall short of the average pace set in 2010," says Warren Jestin, chief economist with Scotiabank. "The severe financial strains confronting some debt-heavy European nations and the U.S. probably won't trigger a double dip."
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