Montréal, March 8, 2011 – Signalling that the economic recovery is still not solidly entrenched, SME leaders are more optimistic than three months ago but remain cautious. So reveals the Fonds de solidarité FTQ SME Confidence Index, which rose from 68 out of 100 in November 2010 to 69 in February. However, they appear to be ready to resume hiring, with 74% planning to do so in the next 12 months, a 5-point jump from the 69% recorded last November.
“We met with many business owners on our recent regional tour, and most of them told us that they were seeing signs of a turnaround,” said Yvon Bolduc, President and Chief Executive Officer of the Fonds de solidarité FTQ. “Many said that they were going to need employees once the recovery is firmly entrenched but expressed concern about being able to find and hold onto workers, which are increasingly mobile and harder to find. Going forward, to make sure they have all the resources they need, our SMEs will have to make extra efforts to offer them the kind of work environment and conditions they’re looking for. Reconciling Gen Y and Baby Boomer expectations calls for tremendous creativity and innovation in HR management.”
For 58% of SMEs, recruitment is their number one concern for the next 12 months. Another major issue is operating costs, considered a big worry for the next year by 40% of the respondents.
Improving business processes a top priority
A growing number of SME leaders are looking to improve their business processes. According to the survey, 44% are planning to make productivity improvement a priority in the next three years, a 4- and 9-point increase, respectively, over November 2010 (40%) and August 2010 (35%).
“Business owners are aware of the productivity issue and many are rethinking their production methods in order to optimize operations. They are buying new equipment, improving their workflow process and reviewing their plant configuration. We were very encouraged to see that our SMEs are investing in productivity enhancement, which in turn, makes them more competitive. The Fonds de solidarité FTQ will continue to back Québec companies with financing solutions that match their needs,” concluded Mr. Bolduc.
Better credit conditions but a worrisome loonie
The proportion of SME leaders who feel that credit conditions are favourable was up sharply, rising from 65% in November 2010 to 71% in February. Worries about access to and the cost of financing appear to be dissipating as the economy picks up steam. In February, only 8% expressed concern in this regard, compared to 15 % last November and 20% in August 2010.
However, the strong Canadian dollar is causing growing apprehension, with 15% of respondents stating that they are worried about the loonie’s rise, compared to 9% last November.
Summary of Survey Results – February 2011
|
Optimistic |
Pessimistic |
Neutral |
Average out of 100 |
SME outlook for the next 12 months |
83% |
14% |
3% |
71.4 |
|
Optimistic |
Pessimistic |
Neutral |
Average out of 100 |
Outlook for your company in the next 12 months |
90% |
7% |
2% |
77.8 |
|
More Hiring |
Layoffs |
No Change |
Average out of 100 |
Net increase or decrease in hiring in Québec over the next 12 months |
74% |
14% |
13% |
63.5 |
|
Investment |
Disinvestment |
No Change |
Average out of 100 |
Equipment investments or disinvestments over the next 12 months |
80% |
9% |
10% |
68.7 |
|
Favourable |
Unfavourable |
Same |
Average out of 100 |
Credit conditions in the next 12 months |
71% |
21% |
8% |
65.1 |
|
|
|
|
|
Main Short-Term Issues for SMEs (multiple answers permitted) |
Recruitment |
58% |
|
|
|
Operating costs |
40% |
|
|
|
Access to and cost of financing |
8% |
|
|
|
Cost of raw materials |
17% |
|
|
|
Rise of the Canadian dollar |
15% |
|
|
|
Competition from emerging markets |
10% |
|
|
|
Deflation |
6% |
|
|
|
U.S. protectionism |
3% |
|
|
|
Methodology – The online survey polled 207 Québec SMEs with 10 or more employees and sales of $5 million and up. Respondents were invited to complete the survey between February 8 and 16, 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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Information:
Source: Josée Lagacé
Senior Advisor, Press Relations and Communications
Fonds de solidarité FTQ
Telephone: 514 850-4835
Cellular: 514 707-5180
E-mail: jlagace@fondsftq.com