High growth entrepreneurs showing less confidence in the Canadian economy
Ivey Entrepreneurs Index says confidence is high that revenues will grow, but hiring intentions less rosy.
LONDON, Ont.—The Ivey Entrepreneurs Index reveals that two-thirds of entrepreneurs surveyed believe the Canadian economy will grow over the next year, a sharp 12% decline from only six-months ago.
Coupled with a decline in overall economic optimism, high growth entrepreneurs suggest they are less like to hire additional employees. This past spring 84% of those surveyed planned on hiring, however, that figure now stands at 77%, marking a 7% reduction.
In spite of diminished economic confidence, the Index found that 90% of entrepreneurs still expect revenues to grow, a figure which has remained relatively steady over the past two years. But over the past six months, the Index shows that 6% fewer entrepreneurs believe their profits will grow in the next year.
“Entrepreneurs in Canada are becoming more cautious,” says Stewart Thornhill, executive director of the Pierre L. Morrissette Institute for Entrepreneurship at the University of Western Ontario’s Richard Ivey School of Business. “This may be indicative of a wait and see attitude amongst this normally bullish group. External factors such as warnings surrounding the looming fiscal cliff in the US and unpredictable economic developments in Europe have dampened the spirits of high-growth private business in this country.”
This is the fifth release of the semi-annual Ivey Entrepreneurs Index.
The Ivey Entrepreneurs Index is based on a short survey of five questions distributed to 350 Fellows of QuantumShift. Entrepreneurs are asked what they expect will happen in their private companies over the next 12 months, covering their outlook for the Canadian economy in general as well as prospects around revenue, profits, hiring, and borrowing.