Inflation and its Impact on Canadian SMEs (BDC Capital)

Summary

• 86% of SMEs report a negative impact of inflation on their company.p.9
• 56% of SMEs believe the worst is yet to come, 29% say we are in the worst moment and 15% say the worst is behind us.p.8
• Salaries (44%), input prices (42%) and transportation (37%) are the price increases that impacted companies most.p.11
• 61% of SMEs have increased the price of goods or services, 41% reduced profit margins and 24% borrowed more.p.12
• Among SMEs borrowing more, 54% use a line of credit, 39% personal funds and 37% a working capital loan.p.14
• Among SMEs raising prices, 41% increase above inflation, 42% on par and 17% below inflation.p.15
• The online survey had 626 respondents between September 13 and 23, 2022.p.4

Key insights

1. 56% of SMEs plan to increase prices in the next 3 months.p.13
2. 38% of SMEs plan to increase productivity in the next 3 months.p.13
3. Only 12% of SMEs that borrow more consider equity, including angel financing and venture capital.p.14
4. 97% of Atlantic SMEs report a negative impact of inflation.p.20
5. 70% of SMEs in B.C. and the North believe the worst is yet to come.p.26
6. Salaries affected 54% of Quebec SMEs, the highest among regions listed except B.C. and the North at 56%.p.21
7. 45% of Prairies SMEs cite energy price increases.p.21
8. 41% of SMEs have increased salaries for their employees.p.12