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Canadian small businesses cautiously optimistic about economic outlook

By CO Staff @canadaone |

Although the speed of Canada's economic recovery may not be turning heads, two recent surveys suggest that Canadian small business owners are approaching 2010 with optimism.

One third of small businesses plan to expand in the next six months, according to an RBC poll conducted in February, and 26 per cent indicated that they are at the start-up stage. It appears that the majority plan to finance growth with their own capital and revenues, as only 14 per cent of owners will require access to credit in the next six months.

This positive outlook is reflected in another national poll which found that over 70 per cent of 300 senior executives of small and mid-sized businesses are optimistic that the economy will turn around.

Grant Thornton International Ltd. noted that 72 per cent of respondents were "very" or "slightly" optimistic about Canada's economic outlook over the next 12 months, with 35 per cent believing the economy will turn around in the second half of 2010, and 22 per cent believing that recovery will take place in 2011.

The survey also found that Canadian business owners mirrored business owners worldwide in terms of the most popular economic strategies they are adopting. In particular,

  • 44 per cent are placing an increased focus on new target markets;
  • 43 per cent are planning to improve the skills of their current workforce; and
  • 39 per cent plan on developing new products and services.

On the provincial front, the Western provinces definitely had the rosiest perspective, followed by Ontario and Quebec.

Percentage of survey respondents who said they were either "very optimistic" or "slightly optimistic" about the year ahead:

  • Western Canada: 85 per cent
  • Ontario: 78 per cent
  • Quebec : 68 per cent;
  • Atlantic Canada: 68 per cent

Economic skeptics can be also be reassured by a recent jump in commodity prices. Scotiabank's Commodity Price Index, which measures price trends in 32 of Canada's major exports, increased by 4.8 per cent month-over-month in January, beginning 2010 on a strong note. The horizon looks bright as commodity prices are expected to continue to strengthen in the first half of 2010.

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