KPMG poll reveals strong sentiment for growth prospects among Canadian business leaders
As Canada’s small and medium sized businesses emerged from the worst of the pandemic, talk of a recession wasn’t welcomed, but being ready for it has helped boost confidence.
It’s a testament to the advice to be prepared for the worst with most SMBs having adjusted their business strategies in anticipation of a recession and, while this is still a possibility, 88% of respondents to a new poll by KPMG in Canada feel confident in their business growing in the next three years.
This represents a 5-point rise from a year ago and puts SMB owners 8 points ahead of the CEOs of large corporations in this regard.
Being prepared for recession has included:
- Cutting business costs/expenses (41%)
- Improving operation efficiencies (37%)
- Temporarily halting large expenditure (30%)
- Reducing headcount (26%)
Almost nine in ten respondents said taking action has put them in a better position and eight in ten believe that this will boost productivity, although it may take time due to inflation.
"Although many small- and medium-sized businesses are in a stronger financial position as a result of their actions to withstand a recession that hasn't materialized, they are now staring down new pressures and interrelated risks,” said Mary Jo Fedy, national leader, KPMG Private Enterprise. “By investing the recent gains they have made into solutions to reduce these threats, they will be on an even more solid footing for future success.''
More than two thirds of poll participants plan to use the new federal 'green' tax credits for clean electricity, clean hydrogen, clean technology and/or carbon capture and 61% say these tax credits are influencing/determining their future business plans and investments.
Emerging risks
While recession is still a concern, 82% of SMB owners said that they are more worried about cost and investment pressures on their operations, and they see cybersecurity, disruptive technologies, energy security and climate change as emerging risks to growth plans.
Dino Infanti, KPMG Partner and national leader, Private Enterprise Tax, says that not every business is thriving.
“For a much smaller proportion of businesses that are struggling to make the necessary adjustments and adapt, this year will be a test of their ability to get back on track,” he said. “Every business is in a different financial situation and should consider conducting a thorough analysis of their cashflow, operations, tax strategy and climate impacts."
