Yet American Express survey finds half of small businesses still experiencing downturn
MARKHAM, ON, March 9 /CNW/ - With rising expectations for growth on the horizon, 38 per cent of small business owners are planning to hire in the next year to manage their increased workload.
The quarterly American Express Small Business Monitor conducted by Angus Reid Public Opinion found that although nearly one in four small businesses let people go over the last two years due to the recession and half are seeing a downturn in their business, the majority (81%) of Canadian small business owners foresee taking on more business in the coming year and 59 per cent expect to expand the scope of their business. Job seekers can also take comfort in the survey findings, with more than half of those hiring (53%) looking for full-time, permanent employees. Better yet, 84 per cent of new positions will pay at least as much as they did last year.
Fueling the hiring plans is an improved confidence in what the future will bring to small business owners' financial situation. More than half (54%) are hopeful their business's future financial position will improve, a sure but steady climb from 40 per cent in March 2009.
"Small businesses are a key contributor to job creation in this country," said Howard Grosfield, VP & General Manager, Small Business Services, American Express Canada and International. "So when the effects of the downturn begin to ease, the impact of these hiring plans will be felt across Canada."
Confidence, risk tolerance and growth
Together with increasing optimism for business in the future, the level of stress that the economy is causing small business owners has dropped. In March of last year, two-thirds of survey respondents said they were stressed by the economy, a number that has since dropped to 56 per cent. Some small business owners are likely sleeping better because they are already seeing a turnaround taking shape: 17 per cent of small business owners who plan to hire in the next year say they have already seen a significant increase in business and thus need more staff.
Expectations of a better year are also pushing small business owners to make other ambitious plans. Of those likely to hire:
- 79 per cent plan to invest in new equipment or other capital
- 57 per cent plan to upgrade their IT
- 39 per cent plan to expand their business's physical space
Confidence also appears to influence owners' comfort in taking on risk. Those willing to accept above average or significant risk have jumped to 25 per cent of respondents from 14 per cent in March 2009. What are the risks small business owners are prepared to take? More than a third are open to using personal assets to cover costs, while a similar proportion are willing to use a line of credit or a bank loan to pay creditors.
"While it is very encouraging to see that the general outlook is bright, we cannot dismiss the fact that this recession is still quite real," Grosfield said. "The fact that half of respondents are still experiencing a downturn and a small number report that bankruptcy is a real possibility means we have not turned the corner yet. That being said, for most small business owners, confidence is high."
American Express Small Business Index improves to C
When combining measures of confidence, performance and small business owner attitudes, the American Express Small Business Index rose to C, or 65 per cent. This reflects incremental yet steady improvement from C- or 61 per cent in March 2009. The change captures both the difficult realities of business in the last year, as well as improving optimism and confidence in business growth.
"The gradual upswing that we've witnessed over the past year has been extremely gratifying as outlook has consistently improved to the point that small business owners are in a position to hire for expected growth in 2010," said Grosfield. "Our ongoing study has proven that there is an unwavering conviction that the rewards of owning your own business outweigh the risks, even during turbulent times."
About the American Express Small Business Monitor
From January 21-27, 2010, Angus Reid Public Opinion conducted an online survey on behalf of American Express Small Business Services among a randomly selected, representative sample of 509 Canadian small business owners who currently have two to 100 employees. The margin of error for the total sample is +/- 4.4%, 19 times out of 20. The results have been statistically weighted according to the Statistics Canada Business Register's most current business size and region data to ensure a representative sample of the entire population of small business owners in Canada. Discrepancies in or between totals are due to rounding.
About American Express Small Business Services
American Express Small Business Services (SBS) is dedicated exclusively to the success of small business owners and their companies. SBS supports business owners with exceptional service. With tailored products and services, the team delivers purchasing power, flexibility, control and rewards to help customers run their business. Specifically, business owners can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, robust online account management capabilities and savings on business services from an expanded lineup of partners. To obtain more information about SBS visit www.americanexpress.ca/smallbusiness.
About American Express in Canada
American Express in Canada operates as Amex Bank of Canada and Amex Canada Inc. Both are wholly owned subsidiaries of the New York based American Express Travel Related Services Company, Inc., the largest operating unit of the American Express Company. Amex Bank of Canada is the issuer of American Express Cards in Canada. Amex Canada Inc. operates the Corporate Travel, Travel Services Network and Travellers Cheques divisions in Canada. American Express opened its first offices in Toronto and Hamilton in 1853 and now employs 3,700 Canadians coast-to-coast.
SOURCE American Express
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