BMO Financial Group

BMO Financial Group
BMO Bank of Montreal

BMO Bank of Montreal

October 07, 2013 06:00 ET

BMO Small Business Confidence Index: Business Owners More Optimistic Than Last Year

- Semi-annual survey shows majority of Canadians believe 2014 will be a better year for business than 2013

- One-third of business owners will be investing more in their business in the coming year

- Most investment will go towards upgrading or purchasing new equipment

TORONTO, ONTARIO--(Marketwired - Oct. 7, 2013) - The semi-annual BMO Small Business Confidence Report, released today, shows that business owners across Canada are more optimistic about the future than this time last year. A majority (62 per cent) said they expect 2014 will be a better year than 2013, and 55 per cent expect their business will grow. Only 6 per cent expect their business to shrink.

The BMO Small Business Confidence Report, launched last fall, produces an index score that measures the level of confidence small business owners have in the economy based on a series of key indicators, including how they feel their business is currently performing, if they believe the next year will be a better/worse year for business and if they expect their business will grow/shrink next year. Factoring in these questions, the Economic Outlook Score was 70 - up from 63 last fall and 59 this spring.

Overall Atlantic Quebec Ontario Alberta BC
Business Confidence Index Score Fall 2013 70 68 70 70 73 74
Business Confidence Index Score Fall 2012 63 65 61 63 66 61

"As we lead up to Small Business Week, the well-being of our small business customers is top of mind. Our semi-annual check-up is showing that business owners in Canada are in good health, and are more optimistic than before," said Steve Murphy, Senior Vice-President, Commercial Banking, BMO Bank of Montreal. "Particularly noteworthy is the fact that the outlook for business next year is consistent across the country, so entrepreneurs are feeling supported and encouraged regardless of where they're located."

2014: Better Year for Business

The majority of business owners in all parts of the country share this positive outlook, with those in BC and Ontario recording the highest score.

Overall Atlantic Quebec Ontario Alberta BC
Believe 2014 will be better for business 62% 59% 60% 65% 58% 66%
Believe 2014 will be worse for business 10% 16% 8% 11% 6% 6%

Prospects for Growth

The number of businesses that expect their company to grow next year is nearly 10 times that of those who expect to see their company shrink.

Overall Atlantic Quebec Ontario Alberta BC
Expect business to grow in 2014 55% 55% 58% 51% 60% 58%
Expect business to shrink in 2014 6% 6% 4% 8% 6% >1%

"The positive outlook among businesses for 2014 is consistent with our forecast for accelerating growth as we move into next year," said Benjamin Reitzes, Senior Economist, BMO Capital Markets. "An improving U.S. and global economic backdrop is expected to provide a lift to Canadian businesses and the economy as a whole."

Investing in 2014

One-third plan to invest in their business. Upgrading equipment represents the most common type of investment (76 per cent), followed by:

  • Hiring more employees (46 per cent)
  • Upgrading technology and systems (45 per cent)
  • Training employees (45 per cent)
  • Lowering overhead costs by transitioning to a mobile workforce (16 per cent)
Overall Atlantic Quebec Ontario Alberta BC
Plan to invest more in 2014 31% 31% 24% 33% 40% 36%
Plan to invest less in 2014 12% 16% 12% 13% 8% 8%

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All results come from a Pollara telephone survey of 301 Canadian business owners, conducted between August 22nd and September 10th, 2013. The margin of error for this survey is +/- 5.6%, 19 times out of 20.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $549 billion as at July 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.

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