Canadian Business Confidence in Their Own Prospects Is at New High, Says 2014 Sage Business Index

Businesses predict an average of 2.5 per cent rise in revenue in next 12 months

RICHMOND, B.C. (November 17, 2014) – Sage North America, a leading provider of business management software and services to small and midsized businesses in Canada for more than 30 years, announced today that its Sage Business Index found that Canadian business confidence is at a four-year high. The Sage Business Index also found that more than half of Canadian businesses predict growth in revenue and more than a third anticipate an increase in staff in the next 12 months.

For the first time in four years, businesses around the world are more optimistic than pessimistic, with scores rising above 50 points across all three areas surveyed: their own prospects, their national economies, and the global economy.

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Confidence

Similarly, Canadian businesses are 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 businesses believe the Canadian 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.

Predictions for growth

The global rise in confidence is apparent in businesses’ predictions for the year ahead. More than half of Canadian business decision makers (54 per cent) expect revenue to grow in the next year by an average of 2.5 per cent (in line with global respondents). More than one-third (37 per cent) 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 per cent who say they expect to reduce staffing levels.

Attitudes to risk

Canadian businesses have also become more open to risk with more than half (53 per cent) of Canadian business decision makers describing themselves as risk seekers, up 1 per cent from last year. This puts them well above the global average (49 per cent risk seeking) but marginally behind their U.S. counterparts (54 per cent).

Exporting

Canadian businesses are relatively unlikely to do business overseas, with nearly two-thirds (62 per cent) saying that their company does no business in a country outside their own, and only 15 per cent saying that they do business in three or more countries. Those who export say their main markets are the U.S. (67 per cent) and China (4 per cent). However, 39 per cent of Canadian exporters say export revenue increased in the last year, with 54 per cent expecting export revenue to increase by an average of 2.3 per cent over the coming 12 months, reflecting a more positive outlook.

When asked whether they receive the support they need from government to enable them to grow exports, only 18 per cent of Canadian businesses agreed. Almost one-third (31 per cent) believe the government should provide greater financial incentives to help, while 20 per cent believe the government should be championing their businesses abroad.

“It’s encouraging that Canadian businesses have a bright outlook about their future growth. They’re the main drivers of the economy, and their ability to thrive and succeed is what will make Canada a better place to do business,” said Nancy Harris, senior vice president and general manager, Sage Canada. “However, bureaucratic and legislative challenges are hindering small and medium-size businesses from reaching their full potential. They’ve expressed a desire for support to overcome these challenges, and it’s important for their voices to be heard so every effort can be made to create a positive business environment for further growth.”

Summary of global statistics
  • Businesses’ confidence in their own prospects rose 2.13 points to 64.14, while confidence in their national economies rose 2.78 points to 51.63 and confidence in the global economy rose 3.08 to 51.68.
  • Fifty-eight per cent of businesses predict their business turnover will grow in the next year by an average of 2.5 per cent, while just 21 per cent think turnover will shrink.
  • Forty-three per cent of businesses say the number of people their business employs will increase in the next 12 months, while only 9 per cent think their headcount will decrease.
  • Nearly half (49 per cent) of business decision makers described themselves as risk seekers, and just 31 per cent described themselves as risk averse, compared with 47 per cent and 32 per cent respectively in 2013.
  • Forty-one per cent of respondents do business in countries outside their own. Those exporters estimate that exports account for 20 per cent of their turnover on average.
  • In the last year, 40 per cent of exporters saw their level of exports increase, with just 11 per cent saying they had fallen.
  • Fifty-four per cent of exporters expect export turnover to increase in the next year, by 3.2 per cent on average.
  • Just 12 per cent of businesses say they receive the support they need from government to grow their exports, with the two biggest barriers being logistical costs (30 per cent) and the level of competition in international markets (25 per cent).
  • Nearly a third of businesses (29 per cent) believe the one thing governments should do to help them grow exports would be to provide greater financial incentives.
  • Twenty-three per cent of decision makers believe the biggest obstacle to growing businesses is the level of government bureaucracy and legislation, while 16 per cent cited tax rates and tax relief and 11 per cent said their government’s handling of economic issues.
  • Nearly a quarter of businesses (23 per cent) believe that the most important thing their government could do to help businesses is reduce business bureaucracy, and more than a fifth (21 per cent) called for a reduction in business tax.

As part of the Sage Business Index 2014, Sage interviewed 13,710 decision makers from small and medium-sized businesses in 18 countries, including 747 in Canada, between July 9 and August 29, 2014. The research follows similar studies conducted in 2011, 2012 and 2013. All data is available on request.

About The Sage Group, plc

We provide small and medium sized organisations with a range of easy-to-use, secure and efficient business management software and services - from accounting and payroll, to enterprise resource planning, customer relationship management and payments. Our customers receive continuous advice and support through our global network of local experts to help them solve their business problems, giving them the confidence to achieve their business ambitions. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and entered the FTSE 100 in 1999. Sage has millions of customers and more than 12,700 employees in 24 countries covering the UK & Ireland, mainland Europe, North America, South Africa, Australia, Asia and Brazil.

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Press contact

Yvonne Yuen
Sage North America
604-207-3563
Yvonne.Yuen@Sage.com

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