Study shows drop in trade activity coincides with gloomy view of
MISSISSAUGA, ON, May 5 /CNW/ - Protectionist sentiment among small- and
medium-sized enterprises (SMEs) in Canada is highest in the country's
francophone province, reveals a recent UPS study.
According to the UPS Business Monitor(SM) Canada, a study conducted by
TNS Canadian Facts, 58 per cent of SMEs in Quebec would prefer to see current
trade restrictions remain in place as a means of protecting Canadian business
The number exceeds the national average of 53 per cent and coincides with
gloomy predictions for business growth in the province. The study shows 14 per
cent of SMEs polled in Quebec predict the economic position of their business
will decline in 2009, up from only one per cent that made the same prediction
in 2007. In addition, the number of businesses predicting a decline in their
workforce stands at five per cent, up from zero in 2007.
In addition, global trade among Quebec SMEs has dropped, with only 22 per
cent currently sourcing materials from abroad, down from 36 per cent in 2007.
"It seems Quebec's small- and medium-sized businesses are reacting to the
economic downturn by retreating into domestic-focused business activity, which
can be dangerous," said UPS Canada President Mike Tierney. "We understand the
fears that many Canadian business owners have about the declining economy and
competition from abroad, but to maintain competitive businesses they must
continue to seek opportunities globally in good times and bad. By doing so,
they will realize greater stability in their business development even during
times of economic volatility."
Conversely, sourcing goods from outside of Canada among Ontario SMEs has
increased from 30 per cent in 2007 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 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. "SMEs in Quebec can realize the same
benefits and UPS can help them by providing the infrastructure and
technological resources they need to make global trade easy and profitable."
The surge in global trade may be fuelling optimism among Ontario SMEs
where only six per cent of respondents predicted a decline in business despite
the faltering economy, while almost half (47 per cent) predict growth in their
near future. Optimism in Alberta is similarly high with only nine per cent of
SMEs predicting a worsening of their economic position and 49 per cent
predicting an improvement. However, Alberta's numbers have changed
significantly since 2007 when zero SMEs foresaw a worsening of their economic
position and 79 per cent predicted an improvement.
In addition to the high protectionist sentiment, SMEs in Quebec remain
leery of global trade with 10 per cent citing it as being detrimental and 49
per cent believing it is neither detrimental nor beneficial.
The United States remains the primary target for sourcing and selling
goods outside of Canada among all businesses. However, the study shows
Canadian SMEs conducting global trade have begun to diversify geographically
with targets 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."
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
UPS (NYSE: UPS) is the world's largest package delivery company and a
global leader in supply chain and freight services. With more than a century
of experience in transportation and logistics, UPS is a leading global trade
expert equipped with a broad portfolio of solutions. Headquartered in Atlanta,
GA., UPS serves more than 200 countries and territories worldwide. The company
can be found on the Web at UPS.com. To get UPS news direct, visit
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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)