Press release

Montréal, May 4, 2010 – With a reading of 69 on a scale of 100, the Fonds de solidarité FTQ SME Confidence Index is down slightly from February, indicating a pause in the rising optimism of SME leaders regarding the future of Québec SMEs. The reading was 71 in February, 58 in December 2009, and 56 in September 2009. It will be recalled that 2009 was a challenging year for SMEs, which nevertheless managed to survive the economic and financial crises. 

In response to this difficult period, the vast majority (80%) of SMEs took one or more actions to improve the way they manage their business. More specifically, 35% redefined their market, 68% trimmed operating costs and 14% diversified their sources of capital. While they remain overall optimistic about the future of Québec businesses, with an average reading of 75.3 (unchanged from February), the number of leaders who are “very optimistic” was down in April: 4 points for the “Outlook for SMEs in general company” indicator and 7 points for the “Outlook for your business” indicator. Also down (10 points) was the response “very strong probability of a sales increase in the next 12 months.”

“This most recent reading is consistent with the main economic indicators, which show a definite but weaker than expected recovery. However, the lessons learned from this difficult period were useful because many companies took a step back to review their activities and way of doing business, which will allow them to come back better prepared to take up new challenges. During this economic crisis, only 4% saw their exports fall and 3% even managed an increase, an encouraging sign. Even more heartening is that most SME leaders expect to see a net increase in personnel over the next 12 months,” said Yvon Bolduc, President and Chief Executive Officer of the Fonds de solidarité FTQ.

Top concerns

Recruitment (58% in April versus 59% in February) and operating costs (50% in April compared to 46% in February) still top the list of concerns for the next 12 months. Less of a worry is the rising Canadian dollar (14%) and the cost of raw materials (13%). Few of the respondents are giving much thought to competition from emerging nations (7%) and U.S. protectionism (6%).

Favourable credit conditions

While most of the respondents feel that credit conditions will be favourable for SMEs over the next 12 months, 25% disagree. The average reading for this indicator was 61.7, compared to 64.2 in February.

Summary of survey results – April 2010

Methodology – The only 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 April 14 and 22, 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 $7.0 billion as at November 30, 2009, 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 2,000 companies. With its 577,000 owner-shareholders, the organization has helped, on its own or with other financial partners, to create, maintain and protect nearly 143,000 jobs. For more information, visit www.fondsftq.com.

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