Canadian entrepreneurs’ confidence in the economy paves the way for positive investment prospects for 2022: BDC study

Study Finds Sales Outlook Over Next 12 Months At Record High Despite Challenges

Main conclusions:

• 84% of companies plan to maintain their investments or invest more in the next 12 months
• 74% of businesses expect Canadian economic conditions to improve or stay the same
• 83% of businesses expect their sales to increase or stay the same, with accommodation and restaurant companies being the most optimistic.
• 55% of companies encounter difficulties hire skilled workers.

MONTREAL, December 8, 2021 / CNW Telbec / – Canadian entrepreneurs have strong confidence in the economy and their investment intentions are above pre-crisis levels, says BDC Investment Outlook 2022 for Canadian Entrepreneurs.

The annual investment intentions survey finds that the percentage of entrepreneurs who expect their sales to improve or remain stable has steadily increased since april 2020, returning to pre-pandemic levels due to the reopening of the economy. The Canadian economy is expected to return to pre-pandemic levels in early 2022.

Around 84% of companies plan to either maintain their current level of investment (64%) or invest more (20%) over the next 12 months. This has increased by 1 percentage point since spring 2021 and by 8 percentage points since december 2020, notes the study.

“The results indicate that entrepreneurs’ confidence in the economy is strong and that investment intentions are above their pre-crisis level, with one in five SMEs planning to increase their investments in 2022,” said Pierre Cléroux, Vice-President, Research and Chief. Economist, BDC.

“Fear of further blockages is slowly fading, thanks to the vaccination, and companies are optimistic for 2022. However, a persistent shortage of manpower, as well as supply chain disruptions linked to the reopening have appeared and will limit investments, ”he adds. “Our study reveals that for the first time since march 2020, labor shortages are starting to constrain investment for a growing number of companies, even as cash flow and demand have improved. ”

The study finds that more than half of the entrepreneurs surveyed (55%) already had difficulty hiring skilled workers, the highest proportion since BDC started its surveys in 2019. As a result, entrepreneurs invest primarily to improve their effectiveness. The businesses most affected by bottlenecks, such as accommodation and food services, tend to invest the most in new types of offerings to attract customers. Firms facing high demand, such as those in the manufacturing sector, invest primarily to improve efficiency.

Investment intentions are at an all-time high in the Atlantic provinces and British Columbia, where 92% and 90% of companies, respectively, plan to maintain or increase their level of investment in 2022. This is an all-time high since July 2019, when BDC first launched its investment intention surveys. Investment intentions remain lower in the Prairies, but are above pre-crisis levels as strong global demand for energy pushes up oil prices. These high prices will help boost investment in 2022, but uncertainty remains high for the energy sector over the long term.

BDC conducted the survey in the fall of 2021 among 1,000 owners of small and medium-sized enterprises (SMEs) in Canada. The aim was to assess their level of confidence in the economy, their business prospects, as well as their investment plans for the next 12 months.

About BDC
BDC is the bank for Canadian entrepreneurs. It provides access to financing and consulting services to help Canadian businesses grow and succeed. Its investment arm, BDC Capital, offers a wide range of venture capital solutions. For more than 75 years, BDC’s sole raison d’être has been to support entrepreneurs in all sectors and at all stages of growth. For more information and to view over 1,000 free tools, articles and testimonials from entrepreneurs, visit bdc.ca.

SOURCE Business Development Bank of Canada

For further information: BDC Media Relations, 1-844-625-8321 / [email protected]