Canadian small-and medium-sized businesses better weathered the recession relative to large firms in the private sector, according to a new report on small businesses and the labour market from RBC Economics.
However, the report released Wednesday said private employment at SMEs in Alberta dropped 7.4% compared to 5.6% among large firms.
"The main driver appears to be in the construction sector" where SME employment fell by 9% compared with a gain of 1.1% at large firms, said the report.
The employment rate in the manufacturing sector of large firms fell by 19%, but SMEs cut payrolls in the manufacturing sector by a more moderate 13.1%, added RBC.
Employment at large firms in the mining, quarrying, and oil and gas extraction industries fell by 16.2% compared with a decline of 7.7% at SMEs.
The RBC report focuses on private sector employment numbers and found that private SMEs in Canada with fewer than 300 employees were better able to cope with the effects of the recession and have been quicker to recover than larger private enterprises. It also found that businesses that depend on the U.S. export market had a more difficult time than those more focused on the domestic market which was not hit as hard by the recession.
Overall in Canada, employment at private SMEs fell 4.2% during the recession, compared with 5.5% among larger private firms.
Also, another report released Wednesday said business confidence made a strong upward move in December, a signal that the economy is at last finding some firmer footing.
The Canadian Federation of Independent Business Barometer Index rebounded to 69.3 in the final month of the year, more than five points above November's level and nearly matching the post-recession high reached in March 2010.
Regionally, Ontario's 69.5 index score was its strongest showing since March. Small business optimism in British Columbia, Alberta and Saskatchewan may have settled back slightly, but these regions remain near the national average, said the report. Overall, business owners in Newfoundland and Labrador are the most optimistic in Canada, pushing their index level up to 72.3.
Measured on a scale between 0 and 100, an index level above 50 means owners expecting their businesses' performance to be stronger in the next year outnumber those expecting weaker performance. The December 2010 findings are based on 825 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to plus or minus 3.4% 19 times in 20.
