Manufacturing sector suffers biggest blow
Canada's number of mid-sized firms plummeted by 17% from 2006 to 2010.
Mid-sized companies have 100 to 499 employees.
The worst-hit sector was manufacturing, which saw over half its
mid-sized companies disappear from 2001 to 2010.
While every region saw declines, Ontario was hit hardest, with a 25%
drop in its number of mid-sized companies followed by Quebec
Mid-sized businesses cited access to financing as the most important
barrier to growth
MONTREAL, Feb. 13, 2013 /CNW Telbec/ - Canada's mid-sized companies, a
key motor of the economy, saw their numbers decline by 17% - 9,370 to
7,814 - from 2006 to 2010, according to a new study by the Business
Development Bank of Canada (BDC).
Hardest hit was the manufacturing sector, which saw over half its
mid-sized firms vanish between 2001 and 2010 from 2,807 to 1,381.
BDC undertook the study to fill an important research gap on mid-sized
firms. The study is based on Statistics Canada data and supported by
survey results from market research firm Harris/Decima. The study is
one of three that the BDC plans to release this year on economic issues
of importance to Canadians.
"This decline should signal a call to action as mid-sized firms are
vital to the Canadian economy," says Pierre Cléroux, BDC Vice
President, Research and Chief Economist and lead author of the study.
"They're few in numbers, yet their contribution to Canada's economic
prosperity cannot be overemphasized. They really do punch above their
Mid-sized firms represent 1% of the total number of companies, but
contribute disproportionately to the Canadian economy, accounting for
16% of Canadian jobs, 12% of GDP and 17% of exports. It is worth noting
that a greater portion of mid-sized firms have their head office in
Canada, compared to large firms (90% versus 77%).
"During the last ten years, medium-sized firms have faced serious
challenges from the rapidly appreciating Canadian dollar, financial
crisis and recession," added Cléroux.
The study also found:
14% of mid-sized firms became small firms (below 100 employees) or
closed down each year from 2006 to 2010. Only 1.4% grew to become
large-sized corporations with 500 or more employees.
While mid-sized companies declined across the country, Ontario was hit
worst, losing 25% of its number of mid-sized firms between 2006 and
2010 (from 3,810 to 2,861).
But the news is not all bleak, the BDC study found. Many CEOs are
optimistic about their prospects during the economic recovery, with 64%
of mid-sized firm leaders saying their annual sales will go up by 4.5%
over the next three years.
Firm owners said the main obstacles standing in their way to becoming
large companies are fierce competition, availability of financing and
employee acquisition and retention.
Mid-sized firms with a board of directors or an advisory board are most
likely to say they expect sales to go up.
"Canadian businesses will continue to face major challenges as
competitive pressures will not disappear. As Canada's development bank,
BDC will look closely at how it can better support our mid-sized firms,
particularly in the manufacturing sector, in order to help them make
the investments required to increase their competitiveness," Cléroux
For detailed study findings consult BDC's "Analysis and research" section.
Canada's business development bank, BDC puts entrepreneurs first. With
almost 2,000 employees and more than 100 business centres across the
country, BDC offers financing, subordinate financing, venture capital,
securitization and consulting services to about 28,000 small and
medium-sized companies. Their success is vital to Canada's economic
SOURCE: BUSINESS DEVELOPMENT BANK OF CANADA
For further information:
BDC- Public Relations
Mobile: (514) 496-7146