- Revenues growing two times faster than GDP
- Top performers make innovation a strategic priority
TORONTO, Oct. 16, 2014 /CNW/ - Two-thirds of mid-sized Canadian businesses surveyed by GE Capital have seen improved company performance, revenue and job growth. These companies expect this upward trend to continue over the next 12 months, predicting mean revenue growth of 7.2 percent — about twice the nominal Canadian GDP growth rate projected by the Bank of Canada.
GE Capital's Canadian Mid-Sized Business Outlook involved interviews with senior financial decision-makers at companies with revenue ranging from C$5 million to $1 billion and operating across nearly every major industry. Companies reported average revenues of $93 million and average employees of 561. For details, please visit www.gecapital.ca/cxosurvey.
The business leaders who were surveyed see innovation as one of the most important tools they can use to continue to encourage growth. Of the highest-performing companies in the survey — those growing more than 10% a year — 46 percent cited innovation as "a very high strategic priority." Across all companies included in the survey, 36 percent said it's a very high strategic priority and 40 percent said moderately high.
"The optimism of these businesses, their expectations for strong revenue growth and job creation, and their recognition of the importance of continuous innovation, leads us to believe their impact will be even more significant in the years ahead," said Kathy Lee, president and chief executive officer of GE Capital Canada, the company's commercial lending and leasing business.
GE Capital has been providing commercial loans and equipment financing in Canada for about 30 years; it has about 30,000 customers nationwide.
Survey results: Confidence and profitability
The companies surveyed are generally confident in their local and national economies, in spite of concerns about the global economy. In addition, company leaders are upbeat about the future of their industries. When asked about their outlook over the next 12 months, 38 percent say they expect their industry to expand and 37 percent expect their new order pipelines to grow.
Executives are investing in their businesses, with 35 percent saying their capital expenditures will increase over the coming year. More than one-half (52 percent) say they're likely to introduce a new product or service and an equal percentage say they're likely to upgrade equipment.
Despite the signs indicating a positive trajectory for the Canadian market, there are concerns about increasing cost structures, which are causing margin pressure. While 43 percent also say they intend to increase pricing of their firm's products or services, more than half (51 percent) expect pricing to stay flat.
Survey results: Innovation
Innovation is a very high or moderately high priority for more than three-quarters (76 percent) of these firms. They're working hard to anticipate market disruptions and benefit from rapid changes in their industries. In fact, 64 percent say they expect to garner at least 10% of their revenue from products introduced in the past three years.
Acknowledging that even small innovations can yield results, 31 percent of respondents say the biggest impact on company performance comes from improvements to existing products or services.
"Like GE, these businesses understand the importance of continuously improving and creating a culture of innovation," said Vanessa Lycos, chief marketing officer of GE Capital Canada. "We believe Canadian companies can be a constructively disruptive force by searching for new solutions to problems."
Survey results: Industry-level findings
GE Capital's Canadian Mid-Sized Business Outlook includes in-depth surveys of participants in four industries:
- Automotive: Innovation is expected to play an increasingly important role. A majority of survey respondents expect light vehicle sales to increase over the next year. Current capacity utilization averages 79 percent.
- Energy and mining: Companies are experiencing rapid revenue and employment growth — trends they expect to continue. In addition, they expect improvements to existing products and services and more sustainable practices to impact the industry in the future.
- Food and beverage: Commodity prices are creating margin pressures. At the same time, consumers' focus on value is influencing new product offerings.
- Trucking: Employment growth is strong but industry leaders are concerned about recruiting drivers — a trend mirrored in the U.S. Their greatest business opportunities are increasing average revenue per mile and acquiring new customers, the leaders said.
To read the industry-level summaries, please visit www.gecapital.ca/cxosurvey.
About the survey
GE Capital's national survey included interviews with senior-level financial decision-makers at 224 privately-held and publicly-traded companies with gross revenue of $5 million to $1 billion ($1 million to $1 billion in the automotive manufacturing, food and beverage production, and commercial trucking industries). The fielding period was June to August 2014.
About GE Capital, Canada
With 17 offices throughout Canada, GE Capital offers a wide variety of financial products and services to address commercial financing needs in many phases of a business' lifecycle. From equipment finance to working capital and growth financing to large asset-based and restructuring loans, we apply our wealth of industry expertise to develop custom solutions for your company. Some of the industries in which we specialize include transportation, construction, manufacturing, aerospace, automotive, mining, energy, wholesale, retail and restaurant and hotel franchise financing. To stay up-to-date on commercial lending and leasing activities in Canada, please follow twitter.com/gecapitalCA.
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.
SOURCE: GE CAPITAL CANADA
For further information: GE Capital, Canada, Brigitte Dagnault, 514-397-5323, 514-346-1207 (mobile), email@example.com; GE Capital, Americas, Lisa Tibbitts, 203-956-4582, 203-803-6142 (mobile), firstname.lastname@example.org