Optimism about Canada’s economy is on the rise. A strong majority of privately held businesses expect to grow in the coming year, and an increasing percentage of the country’s executive chartered accountants expect staffing at their firms to rise.
On the heels of that news from two recent studies, the head of the International Monetary Fund said on Thursday that other countries should follow Canada’s lead in trying to fix their economies.
The surveys, by PwC and the Canadian Institute of Chartered Accountants (CICA), show a rise in economic sentiment.
Seventy-seven per cent of private companies say their business is going to get better in the next 12 months, according to the PwC report.
In PwC’s Business Insights 2012 survey, sentiment about individual firms was up, but the economy is now the biggest concern for private companies. In the previous year’s survey, Canada’s economy was the No. 2 concern.
In the survey of 406 respondents, 81% are planning for growth and expansion in the next 12 months. The top reasons business owners think their situation will improve: higher sales (66%), more market share (50%) and strong company forecasts (49%). Twenty-six per cent are optimistic because they have a “gut feeling” business conditions will improve.
About two-thirds (68%) of respondents to the CICA survey expect their company’s revenues to increase in the next year, according to the third quarter survey.
Sixty per cent cite economic uncertainty in other parts of the world as Canada’s biggest growth hurdle: 40% believe the US economy is the most likely barrier, and 20% point to the European debt crisis.
The CICA Business Monitor showed that 46% of senior finance executives foresee staffing increases, up from 41% in the second quarter. Also, 34% expressed optimism about the prospects for the Canadian economy for the next 12 months. The optimism measure was just 21% in the second quarter of 2012. In the third quarter, 55% were neutral about the economy in Canada.
“The results are encouraging, but we cannot overlook the fact that economic uncertainty has caused optimism among executive chartered accountants to fluctuate from quarter to quarter for some time now,” CICA President and CEO Kevin Dancey said in a news release. “Optimism is moving upward, but we do not know if this is the start of a sustained climb.”
Other key findings in the survey of 230 senior finance executives:
Fifty per cent expressed optimism about their own companies, an increase of one percentage point from the second quarter, and 63% predict an increase in profits.
Of those expecting staffing increases, most predict the number of employees to rise less than 5%.
Forty-one per cent expect staffing to remain the same, and 13% expect staffing to decrease.
Forty-five per cent say their company is having trouble finding skilled people. The two most mentioned categories are skilled labour (78%) and middle management (57%). For that question, respondents were allowed to pick more than one category.
More than a third (36%) of those seeking talent say they are looking outside Canada.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.