Small biz plans to invest in 2020 despite slow growth: poll

Despite eroding confidence in global economies hampered by trade disputes and slow growth, many of Canada’s smalland medium-sized business owners plan to continue investing in their companies over the next 12 months, according to the latest survey from the Business Development Bank of Canada.

Entrepreneurs entered 2020 feeling more pessimistic than they were a year earlier, according to the survey conducted last fall. But this hasn’t dulled a belief among entrepreneurs in the manufacturing and services sectors that their sales will grow this year, and they expect to hire more workers to meet “sustained” demand for their products and services.

“There’s reason to be optimistic,” said Pierre Cléroux, BDC’s vice-president of research and chief economist, noting that he believes the new free trade agreement between Canada, the United States and Mexico will reinstate “favourable conditions” for Canadian goods and services.

Investment intentions for this year is rising in Ontario and Quebec but declining elsewhere, particularly in the western provinces.

In B.C., spending intentions on machinery and equipment has “significantly decreased,” the survey found. Meanwhile, low commodity prices and limited cash flow have made business owners in the Prairies the most pessimistic.

Labour shortages are a concern in Quebec and are noted as a “top factor” limiting such spending.

The BDC survey also found that investment intentions are rising sharply among exporters across the country while, in contrast, they are “sluggish for businesses focused on the domestic market.”

Larger businesses — those that earn more than $10 million a year — are driving spending intentions in Canada, according to BDC.

The business owners that plan to increase their investments say they will do so in areas including technology, marketing, intellectual property and employee training. Investments in tangible assets such as real estate, machinery and equipment are expected to decline.