Finance executives in Canada cast a leery eye toward US economy

Canadian accounting executives are mildly optimistic about their companies’ prospects for 2013. But  uncertainty to the south has them concerned.

Fifty-five per cent of executive chartered accountants believe that the state of the US economy represents the strongest challenge to economic growth in Canada, up from 40% expressing that sentiment the previous quarter in a survey by the Chartered Institute of Canadian Accountants (CICA).

Much of the anxiety could be traced to uncertainty regarding the fiscal cliff. US lawmakers reached an agreement on the “fiscal cliff,” a reference to tax increases and federal spending cuts that would have expired at the end of 2012. The CICA Business Monitor survey was conducted in early and mid-December. Still, the agreement may not be enough to immediately shift the outlook.

“The wait-and-see approach by Canadian executive CAs will likely continue,” Kevin Dancey, the CICA’s chief executive, said in a news release.

At home, Canadian chartered accountants are confident in their own companies, even though more job cuts are expected. Business optimism rose to 56% in the fourth quarter, compared with 50% in the third quarter. Two-thirds of respondents expect revenue to increase, and 65% forecast a rise in profits.

Staffing is expected to increase at 38% of respondents’ businesses, down from 46% in the third quarter. Eighteen per cent expect to cut employees, compared with 13% last quarter, and 43% expect their workforce to remain the same in the next 12 months.

Canadian accounting executives rank reducing costs, improving productivity and increasing domestic sales as being most important for their companies in 2013.

Optimism for the country’s economy dipped slightly in the survey. Fifty-six per cent are neutral about the Canadian economy in the next 12 months. Thirty-one per cent are optimistic – compared with 34% in the previous quarter – and 13% are pessimistic about the next 12 months.

Related CGMA Magazine content:

Canadian Chartered Accountants, Private Businesses More Optimistic About Economy”: Annual survey by PwC and quarterly survey by the CICA showed growing optimism in Canada.

Neil Amato ( is a CGMA Magazine senior editor.