Most Canadian small businesses remain confident in their business prospects and the state of the economy for 2013, with British Columbia and Atlantic Canada leading the way, new research concludes.

BMO Financial Group discloses this finding in new “BMO Small Business Confidence Report.” The study, conducted by Polara, produces an index score that measures the level of confidence small business owners have in the economy and their business prospects based on key indicators, including their predictions for performance, economic outlook, growth expectations and plans for investment.

Based on their answers, 62 percent of business owners have a positive outlook for 2013. Again, businesses in Atlantic Canada (70 percent) and British Columbia (69 percent) lead the charge as the most optimistic.

More than half (52 percent) expect 2013 to be a better year for business and 45 percent anticipate their business will grow.

Further, a sizeable number expect the economy will improve rather than worsen (34 percent versus 16 percent). However, the positive sentiment has waned since the fall when optimists outnumbered pessimists by a 5-to-1 ratio (39 percent versus 8 percent).

The report, conducted by Pollara, also reveals that plans to invest are trending upward. Small business owners indicated they plan to invest more (28 percent) into their business this year, up since the fall.

“The Canadian economy has weathered many storms through the recent economic downturn, and businesses across the country continue to perform well,” says BMO Bank of Montreal Senior Vice President of Commercial Banking Steve Murphy. “However, it’s important that businesses remain adaptable to change and look for ways to grow beyond our borders.

“The U.S. economy is showing strong signs for growth this year, providing positive implications for Canadian businesses looking south for opportunities,” he adds.