CANADA – Canadian entrepreneurs have more confidence in the economy and plan to boost business investment to $96.6 billion in 2017, according to a new study from the Business Development Bank of Canada (BDC). Investments are up 1.6% from the totals invested in 2016.
Seventy percent of the entrepreneurs surveyed expect increased business revenue in 2017, a significant jump from the 45% who had the same expectation last year. Technology businesses, manufacturers and goods exporters report the strongest growth in investing intentions.
The survey of 3,988 executives at small and mid-sized enterprises (SMEs) conducted last August and September found renewed optimism coast to coast, with all provinces and territories showing higher expectations of sales growth than last year.
Reflecting the stabilization of crude oil prices, Alberta SMEs lead with a 17.1% jump in planned investments in 2017 versus 2016. Ontario foresees a 2.9% rise in investment intentions, Quebec expects a 0.6% increase, while Atlantic Canada maintains investment at the same level as 2016. British Columbia and the territories anticipate a 5.4% decline in investment intentions and the Prairies forecast a 17.5% drop.
Nation-wide, top investing priorities are growth and productivity projects, led by IT, training, machinery, equipment and vehicles.
Additional regional details are available in the BDC study, which also found:
- Technology firms show the most optimism, with an average of $410,000 in planned investments in 2017, up 41% from the amount they invested in 2016. The manufacturing sector came second, with an average of $340,000 in investment intentions, up 17% over last year.
- Top-cited obstacles to investment are lack of cash flow and lack of qualified personnel. Lack of confidence in the economy is no longer a top barrier to investment. Two thirds of businesses intend to finance investments mainly with working capital or other internal funds, while less than one in four plan to use a loan or line of credit, despite favourable credit conditions.
- Businesses that invest more tend to project higher income growth. Those projecting 20% or higher growth plan to invest $380,000 on average in 2017. Even companies expecting zero or negative growth aim to invest an average of $150,000.
