Monday, July 13, 2009

Small Business Outlook- The Worst Is Behind US

There was a time when small and medium sized enterprises (SMEs) had a problem with staffing, today it is with customers. Where are the customers? With sales down, SMEs are coming up with creative ways to draw in customers from bundling items for specials of the day, to discounting individual items. Even with the creativity, SMEs are hoping to make a profit.

The state of the economy has SMEs concerned about the year ahead. Consumer spending has weakened. A recent article in the Canadian Business magazine sites a recent poll on the SMEs business outlook for the near future. The poll conducted by the Canadian Federation of Independent Business (CFIB) listed the Business Barometer index for Alberta as 53.2 for May, meaning SMEs in Alberta were slightly more optimistic than pessimistic about the near future. The outlook for the future varied in other provinces with Newfoundland and Labrador having one of the highest Business Barometers at 64.4, Quebec (52.2), and Ontario at 59.9.

The SMEs in Quebec and Ontario are highly dependent upon manufacturing and US trade. British Columbia has been affected by the housing market in the US and the lumber sectors. Optimism amongst SMEs is well below the historical average, however Ted Mallet, the CFIB’s chief economist believes the worst times could be behind business owners, but there is uncertainty when the recovery will begin and how long it will take.

The recovery should likely start in 2012, if not earlier, for Newfoundland and Labrador with the announcement from the government that the Hebron offshore oil project is moving forth. Although operation will be several years down the road (2016- 2018) this announcement has provided a glimmer of hope for SMEs. The project is estimated to create 3500 jobs and to generate approximately$20 billion in royalties over 20 - 25 years. This is obviously good news for businesses in Newfoundland and Labrador, hopefully there will be a similar turn for the rest of the country.

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