Business confidence hits new high, says Sage Business Index
Businesses predict average revenue growth of 2.5% in next 12 months.
RICHMOND, BC — Canadian business confidence is at a four-year high thanks to a healthy outlook on revenue growth and hiring expectations, but they’re still looking for more government support to help business grow in export markets, according to Sage North America’s Business Index.
The index found that more than half of Canadian businesses are predicting revenue growth and more than a third expect to hire new staff in the next 12 months. For the first time in four years, global businesses are more optimistic than pessimistic, with scores rising above 50 points.
Meanwhile, 58% expect business turnover will grow in the next year by an average of 2.5%, while just 21% think turnover will shrink. Forty-three per cent say their number of employees will increase; only 9% think their headcount will decrease.
They’re also increasingly optimistic about their own prospects, with confidence rising 0.68 to 67.48 over the last year, 3.34 points above the global average of 64.14. While most believe the economy is improving, confidence has fallen 3.39 points to 56.04 over the last 12 months. They are also less optimistic about the global economy, with confidence down 1.35 points to 51.20 over the last year.
More than half of Canadian business decision makers (54%) expect revenue to grow in the next year by an average of 2.5% (in line with global respondents). More than one-third (37%) also anticipate that the number of people employed by their company will increase in the next year by 1.6 people on average, compared with just 9% who say they expect to reduce staffing levels.
Canadian businesses have also become more open to risk with more than half (53%) of Canadian business decision makers describing themselves as risk seekers, up 1% from last year. This puts them well above the global average (49% risk seeking) but marginally behind their US counterparts (54%). Nearly half (49%) described themselves as risk seekers, and just 31% described themselves as risk averse, compared with 47 per cent and 32 per cent respectively in 2013.
Canadian businesses are relatively unlikely to do business overseas, with nearly two-thirds (62%) saying that their company does no business in a country outside their own, and only 15% saying that they do business in three or more countries. Those who export say their main markets are the US (67%) and China (4%).
However, 39% of Canadian exporters say export revenue increased in the last year, with 54% expecting export revenue to increase by an average of 2.3%. Forty-one per cent do business in countries outside their own, estimating exports account for 20% of their turnover on average.
In the last year, 40% of exporters saw their level of exports increase, with just 11% suggesting they had fallen.
Only 18% agreed that support business receives from government enables them to grow exports. Almost one-third (31%) believe the government should provide greater financial incentives to help, while 20% believe the government should be championing their businesses abroad. Nearly a quarter of businesses (23%) believe that the most important thing their government could do to help businesses is reduce business bureaucracy, and more than a fifth (21%) called for a reduction in business tax.