The STAPLES Canada Small Business National Quarterly Index, released today, reveals that Canadian small businesses are doing better than they expected they would. The survey, conducted by Angus Reid Strategies, also reveals that two in five small business owners/executives are more confident about the economic conditions in Canada then they were last quarter.
Nearly three-quarters (74 per cent) of Canadian small businesses state that their business situation has held steady or improved slightly in the past three months (up versus 64 per cent in March 2009, an increase of 16 per cent). There are now more small businesses reporting at least improvement (39 per cent) than there are reporting a decline (26 per cent), a reversal from the previous quarter.
"While we must remain cautiously optimistic, this trend towards increased confidence in, and outlook for, both the Canadian economy and improvement by small businesses is certainly a positive sign," says Citibank Canada economist Dana Peterson. "The entrepreneurial nature of small businesses means that they are often better able to react quickly to changing economic conditions. Because of this we often see that they are better at withstanding economic turbulence and can serve as harbingers for change on a bigger scale."
There may be early indications of a shift in how Canadian small businesses are coping with the current economic conditions with less operational cost cutting and more efforts towards building business capabilities and offerings. Fewer, just under half (49 per cent), Canadian small business owners/executives cite cutting operational costs as a primary means of coping with the economic situation in Q2 2009 (down versus 55 per cent in March 2009). Conversely, more than one in three are coping by expanding the scope of business offerings (34 per cent, up versus 29 per cent in March 2009) or by expanding skill sets (34 per cent, up versus 26 per cent in March 2009).
"The results of this survey are quite inspiring. Not only is there optimism among Canadian small businesses towards the Canadian economy, these businesses have seen a respectable degree of success during turbulent economic times," says Steve Matyas, president of STAPLES Canada.
Canadian small businesses are also showing increased confidence for the near future. Over two-thirds (70 per cent) expect at least some improvement to their business over the next six months (compared to 58 per cent in March 2009, an increase of 21 per cent) and the number expecting a decline has dropped from 17 per cent to 6 per cent (a decrease of 65 per cent). Similarly, only 12 per cent feel that economic conditions in Canada will decline over the next three months (down versus 38 per cent in March 2009, a decrease of 68 per cent).