HSBC study estimates that MMEs could increase their economic impact by $12.5 billion
VANCOUVER—Exports account for 11 percent of revenues at Canadian mid-market enterprises (MMEs)—a smaller percentage than their global peers (29 percent or $200 billion). This is according to a global study by HSBC in conjunction with Oxford Economics which explored the views of 1,400 MME senior executives in 14 countries, including Canada, and looked at in-depth economic analysis.
The study also estimates that, globally, if MMEs boosted their export-based revenues by 1 percent, they would increase their economic impact by $12.5 billion across the economies surveyed in the study.
MMEs in Canada employ more than 2.5 million people which is relatively high compared with other countries surveyed. The country’s 6,800 MMEs contribute $350 billion of market sector gross value added (GVA), which together with supply chain and consumption effects is 40 percent of Canada’s GVA. Their direct contribution to GVA grew by 7 percent between 2012 and 2014, slightly faster than the market economy as a whole.
“Mid-market enterprises are the unsung heroes of the global economy—not large enough to influence government policy, but too big to benefit from incentives and support afforded to smaller companies,” said Linda Seymour, executive VP and country head of commercial banking at HSBC Bank Canada. “They force established, dominant players to raise their game through their more agile nature.”
The study found that compared to their global peers, Canadian MMEs have the same level of confidence in both their local and global economies, and they find it easier to export (47 percent versus global average of 36 percent). They are also now finding it easier to export than they did just three years ago.
Compared with other nations, Canadian MMEs are:
The GVA contribution of the MME sector is primarily driven by: mining, manufacturing and business services, each of which contribute between one-quarter and one-fifth of MMEs’ direct contribution to Canadian GVA. While mining accounts for the largest share of MME GVA, labour productivity in the sector is extremely high and it makes a much smaller employment contribution than the other sectors.
In employment terms, manufacturing is the largest MME sector, providing jobs for over 480,000 people. Business services and wholesale and retail are also significant sources of employment.