Canadian executives’ mood brightens about economy

Canadian executive chartered accountants felt more optimistic about the US economy, the Canadian economy and about the prospects of their own companies during the first quarter, according to the “CICA/RBC Business Monitor”.

Of about 320 executives who participated in the survey, only 22% expected the US economy to slip into a recession during the next six months, down from 44% during the fourth quarter.

Optimism about the Canadian economy rose to 32% from 20% in the fourth quarter. And 57% of executive chartered accountants were optimistic about their own companies, up from 49% in the fourth quarter.

“It’s very encouraging to hear that Canadian business leaders are optimistic, and that they’re moving forward with an expectation that their performance will be stronger over the next 12 months, despite the challenging and uncertain economy,” said Andrea Bolger, head of Business Financial Services at RBC, Canada’s biggest bank.

How the US economy fared was clearly linked to sentiment about the Canadian economy and chartered accountants’ own companies. Forty-three per cent viewed the US economy as the biggest hurdle for economic growth in Canada, and 63% believed a US recession would have a negative effect on their companies. Only 18% saw the European economic crisis as the biggest challenge to economic growth in Canada. That’s down from 22% during the fourth quarter.

About two-thirds of the respondents to the survey, which was conducted from Jan. 31 to Feb. 16, expected revenue and profits of their companies to increase this year. Forty-four per cent projected increases in jobs.

—Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.