Southern Ontario (the Golden Horseshoe) may be poised for economic recovery.
The global economic crisis has certainly taken a toll on the Ontario economy. Our base relies very heavily on manufacturing and trade with the U.S. The global economic situation has certainly affected business demand and this has certainly trickled down to most other aspects of our economy. Small business owners are feeling the pinch as traditionally strong sectors have declined. The once robust housing economy in Hamilton and the surrounding area has taken a downturn and that has spun off negative consequences.
However, the Bank of Canada is calling for a rebound for 2010. This is certainly an optimistic view of where our economy can go in such a short period of time but if true this would have excellent repercussions for small business owners. Business sales have stalled lately as entrepreneurs debate whether it is the right moment to buy or sell. Financing is also an issue as banks, which have traditionally been reluctant to lend to 'risky' small businesses, are pulling their credit back to even tighter money as there is just too much liquidity risk in the market right now.
But, if the Bank of Canada's projections are correct then next year could be a bright spot for entrepreneurs. Businesses are bought and sold all the time and if the credit market starts flowing again then we can expect to rapidly go back to that baseline. Small business sales rely on the availability of credit. Without it there is no chance for the budding entrepreneur to take a risk on a smart business opportunity. Business brokers with experience dealing in downturns have seen the market ebb and flow and an ad hoc survey suggests that there is starting to bubble up some promising investor confidence. Once investors regain some more trust in the market and credit starts flowing again then that should be the early signal of the rebound the the Bank has predicted.
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