Montréal, February 11, 2010 – Despite a year filled with challenges, Québec SMEs have remained optimistic about their future, especially since June 2009. With a reading of 71 on a scale of 100, the second edition of the SME Confidence Index, launched in collaboration with Léger Marketing, reveals that Québec SME leaders are confident about the future of their business and other SMEs in general. However, it also implies that although the economic recovery is underway, it remains moderate.
Uneven optimism in 2009
The SME Confidence Index fluctuated between 49 and 58 in 2009. At 49, the Index was at its lowest level in April, indicating a greater concern among SMEs about the future of business in general than for their own business. At that time, they were circumspect, delaying investments in both acquisitions and modernization projects. However, confidence gradually picked up, pushing the Index up to 58 in December, its best performance of the year, as SME leaders felt that the recession was definitely over. This wave of optimism was reflected in recruitment, with 52% of respondents planning to hire in the next 12 months, and in investment projects.
Modest economic recovery
For this second edition of the Index and in order to better gauge the perceptions, behaviours and decisions of Québec SME leaders, Léger Marketing adjusted the calculation, which will be used throughout 2010.1 As such, the first Index of 2010 shows definite but cautious optimism by SME leaders about the future of their business and SMEs in general. That said, 43% of those surveyed are still feeling the effects of the economic downturn, leaving a slim majority of 52% who consider the recession well behind them. Recruitment (59%) and operating costs (46%) still head the list of concerns.
“Although the economic recovery appears to be slower than expected, I am especially pleased to see that our SMEs are trying to find ways to make it through the tough times. According to the latest reading, 75% of our businesses feel that there is a good chance that they will move ahead with modernization projects in the next 12 months. Also, on average, 77% of them believe that sales will pick up during this same period. This is good news for the Fonds de solidarité FTQ, whose specialized teams are actively working to provide financing so that our companies can optimize productivity and improve their competitiveness. Making them more solid here at home and stimulating their growth on other markets is consistent with our mission to create and maintain quality jobs in Québec,” said Yvon Bolduc, President and Chief Executive Officer of the Fonds de solidarité FTQ.
Favourable credit conditions
Most of the respondents feel that credit conditions will be favourable for their business over the next 12 months: the average reading was 64.2 for this indicator. However, 22% do not agree, a sentiment consistent with a modest economic recovery. Twenty percent of respondents cited access to and the cost of financing as a major concern.
Summary of survey results
– February 2010
|
Optimistic |
Pessimistic |
Neutral |
Average out of 100 |
Outlook for SMEs in general over the next 12 months |
92% |
6% |
2% |
75.3 |
|
Optimistic |
Pessimistic |
Neutral |
Average out of 100 |
Outlook for your business over the next 12 months |
93% |
6% |
1% |
80.6 |
|
More hiring |
Layoffs |
No change |
Average out of 100 |
Net increase or decrease in hiring in Québec over the next 12 months |
75% |
13% |
12% |
63.6 |
|
Investment |
Disinvestment |
No change |
Average out of 100 |
Equipment investments or disinvestments over the next 12 months |
75% |
14% |
11% |
69.1 |
|
Favourable |
Unfavourable |
Same |
Average out of 100 |
Credit conditions over the next 12 months |
72% |
22% |
6% |
64.2 |
|
Main short-term issues for SMEs (multiple answers permitted) |
Recruitment |
59% |
|
|
|
Operating costs |
46% |
|
|
|
Access to and cost of financing |
20% |
|
|
|
Cost of raw materials |
15% |
|
|
|
Rise of the Canadian dollar |
15% |
|
|
|
U.S. protectionism |
6% |
|
|
|
Competition from emerging markets |
6% |
|
|
|
Methodology – The online survey polled 201 Québec SMEs with 10 or more employees and sales of $5 million and up. Respondents were invited to complete the survey between January 21 and 31, 2010 on Léger Marketing’s secure Web site. The margin of error for a probability sample of 201 respondents is +/- 6.93%, 19 times out of 20. Five questions make up the index:
· Outlook for Québec SMEs in general.
· Outlook for respondents’ business.
· Capital spending intentions (investment or disinvestment in modernizing equipment).
· Hiring plans for Québec.
· Perception of credit conditions.
1 This is the second year of the Fonds de solidarité SME Confidence Index. The Index was initially designed to measure the direct impact of the economic and financial crisis on the perceptions and outlook of SME leaders in the very near term. Now that the recovery is underway, two aspects have been modified – the wording of the questions and the measurement scale – in order to obtain a more accurate picture, particularly during an economic recovery. These changes must be taken into consideration when comparing previous results.
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For further information:
The telephone number below is for journalists and other media representatives only.
Source:
|
Josée Lagacé
Senior Advisor, Press Relations and Communications
Fonds de solidarité FTQ
Telephone: 514 850-4835
E-mail: jlagace@fondsftq.com |