Business owners believe 2012 will be better

While 2011 has been a trying year for many Canadian businesses, a majority of business owners believe 2012 will be a better one, a new poll indicates.

According to a report released by BMO Bank of Montreal, 51 per cent of Canadian businesses believe 2012 will be a better year than 2011. Just 13 per cent think it will be worse.

Many are planning to increase their own investment in their companies because of that optimism. The poll found just 21 per cent of owners would reduce the amount of money they put into their businesses.

Those who felt it would be a better year had a number of explanations as to why. One of the most common ones was an overall sense of business optimism at 14 per cent, while 12 per cent said they felt the market environment would be better. Other frequent responses included the economy being better now than it was earlier this year and plans of expanding business operations in 2012.

The survey also questioned the 13 per cent who believe they'll be worse off in 2012 compared to this past year and why they felt that way. The most common responses included the economy worsening at 20 per cent and 19 per cent saying their customer demand had slowed. In addition, in approximately 33 per cent of cases, this group of respondents also said because the U.S. economy is under performing, they've changed their plans of investing and hiring more workers.

"Understandably, business owners are increasingly concerned about not only the U.S., where recession risks are rising, but Europe's prospects as well, given the sovereign debt crisis that has engulfed the region," said Jennifer Lee, senior economist at BMO Capital Markets. "Compared to when Canada's recession officially began in the last three months of 2008, exports over the May-July period this year have slipped 6.7 per cent. But while Canadian exports to China have surged 80 per cent over that period, they've declined nearly 10 per cent to the U.S. and nearly 22 per cent to Europe."

She went on to say that coming out of the most recent recession, many Canadian businesses have taken steps to minimize their risk by sourcing with alternative suppliers and not relying too much on a single customer sector or market.