Professor Luc Godbout Will Collaborate on the
Fonds de solidarité FTQ SME Confidence Index
Montréal, June 1st, 2011 – The Fonds de solidarité FTQ (“Fonds”) today unveiled the results of its SME Confidence Index and at the same time announced its partnership with Professor Luc Godbout of Université Sherbrooke and lead researcher in public finance at the university’s Research Chair in Taxation and Public Finance. “It’s very helpful for a researcher in public finances to understand some of the issues that influence SME decision-making and the potential consequences on economic growth and employment. The SME Confidence Index is a useful tool that gives us insight into business sentiment. But the indicators I find most interesting are those that give us an idea of what companies plan to do to improve productivity and address such challenges as labour and succession. Over the next year, I will have an opportunity to provide input on some of the questions that make up the survey, which polls SME leaders three times a year, and comment on some of the findings,” said Professor Godbout.
SME Confidence Index comes in at 70
Given that the economic recovery is still somewhat tenuous, SME owners remain guardedly optimistic. The Index thus rose 1 point, from 69 in February to 70 (out of 100) in May, indicating a good level of optimism about the future of their businesses.
Succession is a major concern
Many SMEs will be handing over the reins in the next 10 years, making succession an issue. Questioned on this topic, more than half (53%) considered it an important factor. “According to the survey, succession was the predominant issue for 55% of respondents, meaning that more than one out of two is worried about finding the right person, be it someone in-house or from outside, to take over their businesses. The financing aspect of the transfer is much less of a factor (20%) as is the transition process (19%). These findings confirm a situation that has been on-going for a number of years now. According to the Ministère du Développement économique, Développement et Exportation, 55,000 owners will leave their businesses by 2018. This number is enough to show that the governments and financial institutions alike must do their part to make these transitions possible,” explained Professor Godbout.
Mindful of the tremendous business succession challenge facing Québec, the Fonds de solidarité FTQ and its network are playing a key role, by, among other things, aligning themselves with "Opération relève Québec 2011,” a vast information and networking campaign aimed at both business buyers and sellers that takes the form of workshop-conferences in 13 cities.
Businesses are investing
Respondents are overall optimistic about the future of Québec SMEs in general (71.8) as well as about the short-term outlook for their own businesses (77.4). Many are planning to upgrade their equipment, with 78% considering such an investment in the coming year.
SMEs in hiring mode but concerned about labour training
The majority of respondents (72%) plan to hire in the year ahead. Recruitment is a key issue for SMEs and heads the list for 55% of those surveyed. SME owners are also paying more attention to training, with 22% citing employee training as essential to improving productivity. This indicator was up 5 points over the 17% recorded in February.
Business owners mindful of the environment
Overall, 83% of SMEs plan to take concrete steps towards sustainable development over the next 18 months, mainly by implementing or improving their printing reduction (52%) and recycling (41%) policies.
Summary of Survey Results – May 2011
|
Optimistic |
Pessimistic |
Neutral |
Average out of 100 |
SME outlook for the next 12 months |
84% |
12% |
3% |
71.8 |
|
Optimistic |
Pessimistic |
Neutral |
Average out of 100 |
Outlook for your company in the next 12 months |
89% |
8% |
4% |
77.4 |
|
More Hiring |
Layoffs |
No Change |
Average out of 100 |
Net increase or decrease in hiring in Québec over the next 12 months |
72% |
14% |
15% |
64.9 |
|
Investment |
Disinvestment |
No Change |
Average out of 100 |
Equipment investments or disinvestments over the next 12 months |
78% |
10% |
11% |
69.9 |
|
Favourable |
Unfavourable |
Same |
Average out of 100 |
Credit conditions in the next 12 months |
70% |
21% |
10% |
64.0 |
|
|
|
|
|
Main Short-Term Issues for SMEs (multiple answers permitted) |
Recruitment |
55% |
|
|
|
Operating costs |
40% |
|
|
|
Access to and cost of financing |
12% |
|
|
|
Cost of raw materials |
17% |
|
|
|
Rise of the Canadian dollar |
13% |
|
|
|
Competition from emerging markets |
10% |
|
|
|
Deflation |
3% |
|
|
|
U.S. protectionism |
5% |
|
|
|
Methodology – The online survey polled 202 Québec SMEs with 10 or more employees and sales of $5 million and up. Respondents were invited to complete the survey between May 10 and 18, 2011 on Léger Marketing’s secure Web site. Five questions make up the index.
· Outlook concerning Québec SMEs in general
· Outlook concerning respondent’s business
· Capital spending intentions
· Hiring plans for Québec;
· Perception of credit conditions.
About the Fonds de solidarité FTQ
The Fonds de solidarité FTQ helps drive our economy. With net assets of $7.7 billion as at November 30, 2010, the Fund is a development capital investment fund that channels the savings of Quebecers into investments in all sectors of the economy to help further Québec's economic growth. The Fund is a partner, either directly or through its network members, in 2,052 companies. With its 577,511 owner-shareholders, it has helped, on its own or with other financial partners, to create, maintain and protect 150,133 jobs. For more information, visit www.fondsftq.com.
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