• 84% of businesses are planning to maintain investments or invest more in the next 12 months
  • 74% of businesses expect Canadian economic conditions will improve or remain the same
  • 83% of businesses expect their sales will increase or remain the same, with accommodations and food services businesses the most optimistic.
  • 55% of businesses are experiencing difficulties hiring qualified workers.

Canadian entrepreneurs’ confidence in the economy is strong and their investment intentions are above pre-crisis levels, according to BDC’s Canadian Entrepreneurs’ 2022 Investment Outlook.

The annual survey of investment intentions finds that the percentage of entrepreneurs who expect their sales to improve or remain stable has steadily increased since April 2020, returning to pre-pandemic levels due to the reopening of the economy. The Canadian economy is expected to return to pre-pandemic levels in early 2022.

About 84% of businesses are planning to either maintain their current level of investment (64%) or to invest more (20%) in the next 12 months. This has increased by 1 percentage point since spring 2021 and by 8 percentage points since December 2020, the study noted.

“The results indicate that entrepreneurs’ confidence in the economy is strong and that investment intentions are above their pre-crisis level, with one out of five SMEs planning to increase their investments in 2022,” says Pierre Cléroux, Vice President, Research and Chief Economist, BDC.

“Fear of new lockdowns is slowly fading, thanks to vaccination, and businesses are optimistic for 2022. However, a persisting labour shortage, as well as supply chain disruptions linked to the reopening have emerged and will limit investments,” he adds. “Our study finds that for the first time since March 2020, labour shortages are starting to hold back investments for a growing number of businesses, even though cash flow and demand have improved”.  

The study finds that over half of entrepreneurs surveyed (55%) already had difficulties in hiring qualified workers, the highest proportion since BDC started its surveys in 2019. As a result, entrepreneurs are mainly investing to improve efficiency. Businesses most affected by lockdowns, such as those in accommodation and food services, tend to be investing the most in new types of offerings to attract clients. Businesses facing high demand, such as those in the manufacturing sector, are investing mostly to improve efficiency.

Investment intentions are at an all-time high in the Atlantic provinces and in British Columbia, where 92% and 90% of businesses, respectively, plan to maintain or increase their investment level in 2022. This is an all-time high since July 2019, when BDC first started its investment intention surveys. Investment intentions remain lower in the Prairies, but they are above pre-crisis levels as high global demand for energy pushes up oil prices. These high prices will help spur investments in 2022, but uncertainty remains high for the energy sector in the long term.

BDC conducted the survey in the fall of 2021 among 1,000 business owners of small and medium-sized enterprises (SMEs) in Canada. The objective was to gauge their level of confidence in the economy, their business outlook, as well as their investment plans for the next 12 months.