Seventy-eight percent of Canadian small and medium-sized enterprises (SMEs) say they intend to invest in new projects within the next 12 months, according to a survey by the Business Development Bank of Canada (BDC).
“We survey entrepreneurs’ investment intentions on a regular basis; we’ve seen that they’ve become increasingly more optimistic during the last three years, particularly exporting companies, which are the most definitive about investing in their business,” said Pierre Cléroux, chief economist, BDC.
Entrepreneurs who plan to invest expressed higher investment intentions in marketing (57%), technology (49%), and in operations optimization (47%). They will likely turn to cash flow, working capital or a line of credit to make these investments.
A larger portion of respondents in the Atlantic provinces and the Prairies plan to invest in technology (65% and 59%, respectively). Companies in Ontario are more likely than those in other regions to invest in marketing (68%).
Overall, R&D projects are ear-marked to receive the greatest amount of money ($70,000) with over one third of SMEs planning to invest over $100,000.
A greater proportion of exporters (87%) plan to invest in at least one initiative (i.e. technology, marketing, R&D or operations optimization) compared with non-exporters (75%).
Overall, a significantly larger percentage of exporters also plan to use their working capital (54%) and Scientific Research and Experimental Development (SR&ED) credits (29%) to finance their investment plans. These results stand at 39% and 13% respectively among non-exporters.
“What is also encouraging is that entrepreneurs across all regions of the country have expressed strong investment intentions,” he added. “From coast to coast, we’re seeing robust numbers; a wave of optimism has swept even traditionally less bullish regions,” says Cleroux.
Ontario leads the country, where 81% of those surveyed said they intend to invest in new projects within the next 12 months, followed closely by British Columbia (79%) and the Prairies (77%).