MONTREAL, January 18, 2021 / CNW / – As the second wave of the COVID-19 pandemic intensifies, Canadian entrepreneurs are gradually regaining confidence in the Canadian economy, despite additional health restrictions, according to BDC’s 2021 Outlook on the Investment Intentions of Canadian Entrepreneurs investigation. The survey, conducted in December, examines entrepreneurs’ confidence in the economy, business and hiring prospects, and investment plans over the next 12 months. The survey also reveals that a growing number of business owners plan to invest more in 2021 than last year.
The mood of Canadian entrepreneurs has improved significantly from the previous quarter, when more than 50% of them believed the economy would deteriorate in the coming months. Net business confidence is up 34 percentage points from the previous quarter. The rise in investment intentions is largely explained by growing business confidence and improving sales prospects. BDC’s 2021 outlook calls for both optimistic (35%) and pessimistic (36%) entrepreneurs, a marked improvement. However, high debt, weak demand, additional containment measures and news of viral mutations could dampen this renewed optimism. Investment intentions are improving significantly compared to last year, but are expected to remain low in 2021.
âIt has been a difficult year and although these are the most positive results we have seen since the onset of the health crisis, we believe that corporate spending will remain low over the next few months,â said Pierre ClÃ©roux, Vice-President, Research and Chief Economist. “Our survey paints a picture of an economy that will experience a slow but sustained recovery. We are happy to move on to 2021.”
Improved productivity, sales and marketing appear to be the main drivers of investment, while high economic uncertainty remains the main factor holding back investment spending, but to a lesser extent than in quarters previous ones.
Other key findings:
- There are more entrepreneurs (38%) who expect an increase in sales rather than a decrease (25%) over the next 12 months, for the first time since the onset of the recession last spring.
- The pressure on capacities and the difficulties of hiring accumulate, 50% of Canadian entrepreneurs say it would be difficult to either hire new qualified employees or meet an unexpected increase in demand because they are operating at full capacity or above. Large companies (29%) are more likely to increase their workforce.
- Firms in the resource sector show strong recovery in investment intentions for the coming year, as the situation worsens for wholesalers and technology companies.
- Iinvestment intentions improve the most Quebec and the Atlantic provinces, while in other provinces, net intentions remain negative mainly due to economic uncertainty.
- Entrepreneurs are the most likely to invest in intangibles (53%), such as software, marketing or employee training.
BDC’s quarterly survey, conducted by global research firm Delvinia, surveyed 1,001 small and medium-sized business owners in December 3 to 18, 2020 on their investment intentions for the next 12 months. The results are presented as a balance of opinion, i.e. the difference between the proportion of companies with positive and negative opinions. Companies with a neutral opinion are excluded from the calculation.
BDC is the bank for Canadian entrepreneurs. It provides access to financing as well as 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’Ãªtre has been to support entrepreneurs in all sectors and at all stages of growth. For more information and to view more than 1,000 free tools, articles and testimonials from entrepreneurs, visit bdc.ca
SOURCE Business Development Bank of Canada
For further information: BDC Media Relations, [emailÂ protected], 1-844-625-8321