Study shows dangerous trend away from global trade, toward domestic
MISSISSAUGA, ON, May 5 /CNW/ - Small- and medium-sized enterprises (SMEs)
in Canada's Prairie Provinces are the most optimistic in the country about
their business prospects for the coming year, but have taken the dangerous
move of shifting their focus away from global markets and are focusing on the
domestic economy for the growth of their enterprises.
According to the UPS Business Monitor(SM) Canada, conducted by TNS
Canadian Facts, 59 per cent of Prairie SMEs polled predict their economic
position will improve in 2009, while only one per cent foresees a worsening of
its position. The numbers are significantly different from data collected in
2007 when 10 per cent of Prairie SMEs predicted a worsening of their economic
The results reflect the recent prosperity seen in Manitoba and
Saskatchewan, making the Prairies Canada's new economic "promised land."
However, this recent economic surge has pushed many SMEs away from conducting
In fact, today only seven per cent of Prairie SMEs sell goods overseas,
down from 22 per cent in 2007.
"The trend we're seeing in the Prairies is a shift in focus from the
global to domestic economy, which is the polar opposite of what SMEs in other
provinces, such as Alberta and Ontario, are doing," said UPS Canada President
Mike Tierney. "It's important to remember that global trade is an inevitable
and crucial part of sustaining a well-rounded successful business, maintaining
overseas partners during good times and bad will ensure consistency in
business growth while protecting against the effects of an economic downturn."
Since 2007, sourcing goods from outside of Canada among Ontario SMEs has
jumped from 30 to 40 per cent. Meanwhile, Alberta - where SMEs had the lowest
level of global trade in Canada in 2007 - saw an increase in sourcing from
abroad from six per cent in 2007 to 39 per cent in 2008, and an increase from
eight per cent to 23 per cent in selling abroad.
"Entrepreneurs in Ontario and Alberta have clearly seen the benefits of
conducting overseas trade and are using it to their advantage during these
difficult economic times," said Tierney.
The surge in global trade may be fuelling optimism among Ontario SMEs
where only six per cent of respondents predicted their economic position would
worsen despite the faltering economy, while almost half (47 per cent) predict
it will improve in the near future.
Despite the nationwide impact of the recession, the percentage of SMEs
predicting a drop in their workforce has risen only among SMEs in Alberta,
Quebec and British Columbia. None of the SMEs polled in the Prairies predicted
a decline in their workforce, compared with four per cent in 2007.
The United States remains the primary target for sourcing and selling
goods outside of Canada among all businesses. However, Canadian SMEs
conducting global trade have begun to diversify geographically, targeting
markets in Asia, Europe and South America.
"We're beginning to see the impact of the economic downturn in the U.S.
in global trade trends," said Tierney. "Businesses here are beginning to
realize the wealth of opportunities outside of the NAFTA comfort zone and are
taking advantage of them as a means of weathering the economic storm."
SMEs in Quebec remain leery of global trade with 10 per cent citing it as
being detrimental and 58 per cent (the highest in Canada) preferring to
maintain trade restrictions.
Despite the recent economic decline in Alberta fuelled by the drop in the
energy sector, the Rocky Mountain province remains the top choice for SMEs in
Canada to establish a new location for their business outside of their home
province, followed by B.C. and the Prairies.
The UPS Business Monitor Canada survey was conducted by TNS Canadian
Facts between November 12 and December 3, 2008, and surveyed a total of 505
SMEs across the country. The entire study has a margin of error +/- 4.4 per
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For further information:
For further information: Linda Heredia, APEX Public Relations, (416)
924-4442 ext. 240, firstname.lastname@example.org; Tara Smith, UPS Canada, (905)