Business Confidence in the Canadian Economy Climbs to Three-Year High

Sage Business Index Finds Business Confidence at a Three-Year High; Canadian Businesses Among the World's Biggest Risk-Takers

RICHMOND, BC--(Marketwired - Oct 28, 2013) - Global business confidence is returning, encouraging a fresh attitude to risk-taking according to research published today by Sage. Through its annual Business Index, Sage surveyed more than 11,000 small and medium-sized businesses in 17 countries across the world and found that businesses are now more confident than they have been for three years.

All scores recorded this year were at their highest since the Business Index began in February 2011, suggesting that business confidence is recovering rapidly following the worst of the global economic crisis.

Canadian businesses are most confident about their own prospects, which scored 66.80, an increase of 5.73 points on last year. They also believe the Canadian economy is improving, scoring it at 59.43, up from 53.82 in 2012. Similarly, Canada is one of the few places where businesses are optimistic about the global economy, scoring it at 52.55, up from 44.44 in 2012 and 3.95 points higher than the global average.

In the new climate of economic confidence, business decision makers identified risk taking as key to growth. Half (52%) of Canadian respondents describe themselves as risk takers, and 78% of these say they take risks because they believe they need to in order to succeed. Just 27% of Canadian businesses described themselves as risk averse.

For Canadian businesses, the core business priority is winning new customers (24%), and this is also believed to be the main challenge for growing businesses (19%). However, too much bureaucracy is named the biggest challenge to conducting business in Canada by 19% of the respondents. Nearly half of Canadian businesses (46%) argue that cutting this bureaucracy would be one of the most important things the government should do to help business confidence.

"It is refreshing to see Canadian business owners continue to believe in their own ability to effectively run a business and ultimately prosper," said Nancy Harris, Sage senior vice president and general manager, Canada. "The continued optimism that small business owners have in both the domestic and global economies, complemented by the confidence they have in their own prospects, bode well. However, there are still a number of areas that need to be addressed, namely, addressing the challenges that businesses face obtaining funding."

Despite greater optimism, most Canadian businesses feel that banks and the government are behind the curve and are failing to make the most of increased business confidence. More than half (55%) of businesses agree that banks aren't doing enough to make funding available to small businesses, and a similar proportion (50%) feel that the government needs to put more pressure on banks to lend.

Due to this perceived lack of support from banks and government, more than half (52%) of businesses agree that they need to look at alternative funding sources. However, while 37% of businesses feel positive towards peer-to-peer lending and crowd-funding, only 2% have already used it.

"Following the economic challenges businesses have endured over the past few years, it is encouraging to see that business owners' confidence in the economy is increasing," said Mark Redman, CEO and president of Feelgood Treats located in Delta, B.C. "Having been a small business owner for more than five years, we've dealt with economic ups and downs and are now looking toward the future and feeling confident about our prospects for growth."

Note to editors: As part of the Sage Business Index 2013, Sage interviewed 11,734 decision-makers from small and medium-sized businesses in 17 countries, between July 31 and August 28, 2013. The research follows similar studies conducted in 2011 and 2012. All data is available on request.

Summary of Global Statistics

  • Global confidence at a Business Index record high as businesses' optimism about own prospects rises 5.5 points in 2012.
  • U.K. businesses are increasingly confident about their own prospects (62.55, up from 58.46 in 2012). Business confidence in the U.K. is also higher than in all of the Eurozone countries, including France, Portugal, Spain and even Germany.
  • Forty-seven per cent of business leaders describe themselves as "risk takers," with 73% saying risk is necessary to succeed.
  • In Brazil, business decision makers are more willing to take risk to succeed in business. More than half 56% of Brazilian respondents describe themselves as risk taking -- more than any other market and twice the number who describe themselves as risk averse, 24%.
  • U.K. businesses describe themselves as among the most risk averse (39% versus 32% globally). Austrians are the least likely to take risks, with nearly half 48% describing themselves as risk averse.
  • Fifty-seven per cent of small businesses agree they need to look to alternative sources of funding, but only 42% feel positive about peer-to-peer funding.
  • Banks aren't doing enough to make funding available to small business, according to 69% of business leaders.
  • Governments need to do more to support small businesses, with 63% agreeing they should put greater pressure on banks to lend.

About Sage

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