Press release

Montréal, September 14, 2010 – A probable reflection of SME fears of a double-dip recession, the new Fonds de solidarité FTQ SME Confidence Index fell for the second time in a row, 1 point from April (69) and 3 points from February (71). The number of business owners who claim to be “somewhat pessimistic” about the future of the economy more than doubled in just six months, from 4% in February to 10% in August.

Confidence about the future of SMEs in general fell 4 points between April (49%) and August (45%) among those who responded “very optimistic.” However, the level of optimism remained fairly stable concerning their own company.

“The lack of confidence in the future of SMEs is probably linked to the lingering economic uncertainty in the U.S., which is a big customer of Québec SMEs, because the economic situation is quite stable on this side of the border. Fear of a double-dip recession and even deflation are surely the reason companies are holding back. Indeed, according to the survey, the number of owners who plan to make acquisitions in the next 12 months has decreased,” stated Yvon Bolduc, President and Chief Executive Officer of the Fonds de solidarité FTQ.  

“Our teams are attuned to our partners’ needs. Despite the uncertain context in North America, there may still be opportunities out there and our job is to back companies with strategic financing to help them boost their competitiveness. I’m also heartened to see that they’re still open to upgrading their plants. The index shows that 78% of SMEs feel that they will very likely purchase new equipment in the year ahead,” concluded Mr. Bolduc.

Sales expected to rise, but mostly in Canada

Québec SMEs are quite resilient, with the vast majority predicting sales growth over the next 12 months (88% believe that sales will likely or very likely increase). That said, few intend to export outside Canada.

Environmentally responsible companies

Much like the Fonds de solidarité FTQ, which will publish its first sustainable development report on October 2, SME leaders take their socio-economic role seriously and are striving to reduce their environmental footprint. Indeed, 84% said that they want to take concrete actions in this regard over the next 18 months. Reducing the volume of printed material and increasing recycling are the two main measures implemented or contemplated, followed by educating employees on responsible energy consumption in the workplace and replacing equipment with more energy efficient models.

Top concerns

Recruitment (58%) and operating costs (40%) still top the list of SME concerns in the near term. Figuring fifth on the list (12%), the appreciation of the Canadian dollar does not appear to be holding back growth.

Summary of survey results – August 2010

Methodology – The only survey polled 204 Québec SMEs with 10 or more employees and sales of $5 million and up. Respondents were invited to complete the survey between August 16 and 24, 2010 on Léger Marketing’s secure Web site. 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.

About the Fonds de solidarité FTQ

The Fonds de solidarité FTQ helps drive our economy. With net assets of $7.3 billion as at May 31, 2010, the Fonds is a development capital fund that channels the savings of Quebecers into investments in all sectors of the economy to help further Québec's economic growth. The Fonds is a partner, either directly or through its network members, in 2,052 companies. With its 577,511 owner-shareholders, the organization 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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