Canadian SMEs remain cautiously optimistic amid rising costs and global uncertainty, according to latest international study

  • Business confidence is relatively high with 54% of SMEs reporting that the Canadian economy is going strong and 39% expecting it to improve in the next 12 months 
  • Rising costs, tight cash flow and government regulations are the top three issues facing small businesses today
  • One in three (34%) SMEs are struggling with cash flow and half expect growth in 2020
Rising costs are the greatest challenge facing small businesses in Canada, according to the latest Global Business Monitor study from global SME partner, Bibby Financial Services (BFS) and global leader in trade credit insurance Euler Hermes.

Findings of the research, based on a survey of more than 2,300 SMEs in 13 countries across Asia, Europe and North America, show that two in five businesses (42%) believe rising costs and overheads are their greatest challenge. Cash flow (34%) and government red tape (28%) were also cited in the top three concerns in 2019.

Despite concerns about the knock-on effects of global uncertainty, 49% say they believe their business performance will improve in the next 12 months, and 40% believe they will maintain existing growth levels.

Managing Director at Bibby Financial Services, Canada, Kash Ahmad, said: 
“It is an exciting time for Canadian SMEs. Despite current challenges and wariness about the global economy, Canadian businesses remain strong and in good position to take advantage of growth opportunities at home and abroad.

“In addition, it is important for businesses to continue to have the confidence to invest in times of economic uncertainty as they’ll emerge stronger than before. Canadian SMEs are on the right track with 89% planning to invest over the next 12 months. Investment in sales and marketing coupled with a relatively stable domestic economic environment offer the perfect conditions for businesses to seek new opportunities worldwide.”

Ludovic Subran, Global Chief Economist, Euler Hermes, added: 
“As the risks of a recession rise and global GDP is expected to grow at its slowest pace since 2009 in 2020 (+2.4%), it is all the more important that SMEs have virtuous payment loops to avoid going bust. Global insolvencies are expected to rise by 8% in 2020 for the fourth consecutive year, and one in four bankruptcies for SMEs comes from a non-payment.”

The third BFS Global Business Monitor since 2016 shows Canadian SMEs are engaging in international trade. Though only about 28% export goods and services, 42% of exporters report that exports account for over 50% of their sales. Access to finance plays an important role in businesses’ ability to sell internationally with 44% ranking it as the number one requirement to make it easier to export.

The Global Business Monitor report is available to download at www.bibbycanada.ca.

8 October 2019


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