Another tough year for SMEs

After three difficult years due to the pandemic, the majority of small businesses are still ending 2022 with below-par revenues, according to the results of the latest Business Barometer.

Another tough year for SMEs

After three difficult years due to the pandemic, the majority of small businesses are still ending 2022 with below-par revenues, according to the results of the latest Business Barometer.

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“According to our SME [Small and Medium Business] Health Tracking Chart, 52% of small businesses still have below-par revenues and 58% have pandemic debts to repay, averaging over $114,000,” explained Simon Gaudreault, vice-president of research at the Canadian Federation of Independent Business (CFIB), in a press release.

Despite the current challenges, however, 38% of SME owners believe that their business is doing well, while 17% say the opposite.

This data paints a similar picture at the end of 2019, where 38% of owners said they were also satisfied with the financial health of their business, compared to 16% who were not.

“It is encouraging to see certain indicators returning to normal, for example how small business owners perceive the general state of their business. However, we must remember that too many SMEs have still not recovered,” added the chief economist.

Since the beginning of the year, indicators related to the supply chain have improved. Shortages of skilled labour, unskilled or semi-skilled labor have also eased recently, but remain a major challenge affecting 49% and 36% of SMEs respectively.

Operating costs were nevertheless “a problem with a historically high proportion”, the statement said, while fuel and energy prices impacted 73% of SMEs in December.

Businesses are slightly more optimistic than last month, although the 12-month long-term confidence index remains at rather low levels at just 50.9 points.

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