Economic optimism up but oil prices and protectionist sentiments cited as top challenges: CPA Canada Business Monitor

Optimism about the national economy is up among professional accountants in leadership positions with oil prices and protectionist trade attitudes viewed as top challenges, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).

TORONTO, February 10, 2017 – Optimism about the national economy is up among professional accountants in leadership positions with oil prices and protectionist trade attitudes viewed as top challenges, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).

The latest CPA Canada Business Monitor (Q4 2016) finds that optimism has pulled ahead of pessimism for the first time since the second quarter of 2015. Nearly a third (32 per cent) of the business leaders surveyed are optimistic about the prospects for the Canadian economy over the next 12 months, up from 21 per cent the previous quarter. Those with a pessimistic outlook fell to 21 per cent, down from 29 per cent in the third quarter of 2016. Forty-six per cent were neutral in Q4.

The top two challenges to growth of the Canadian economy cited by the respondents are oil prices and protectionist trade sentiments in the United States.

“While the Canadian economy continues to show great resilience, business leaders are rightly concerned with the uncertain economic environment,” says Joy Thomas, president and CEO, CPA Canada. “The upswing in optimism is encouraging but the recent rhetoric around trade negotiations in the U.S. and the persistence of low oil prices are contributing to lingering economic uncertainty here in Canada.”

Federal Budget
CPA Canada will seek greater clarity from the Canadian government in the next federal budget around the managing of the country’s finances. With annual deficits currently forecast to run longer than initially anticipated, 83 per cent of the survey respondents are either very or somewhat concerned with the level of debt the government is taking on.

“The federal government made a commitment to invest in Canada’s economy but there is always an uneasiness associated with deficit financing,” explains Thomas. “CPA Canada will be looking for the government to outline how and when it plans to return to balance budgets. Accountability is essential.”

Company specific
Business optimism sits at 54 per cent, compared with 47 per cent the previous quarter. These findings reveal how the survey respondents view the prospects for their own companies over the next 12 months.

Focusing on revenues, 65 per cent of the respondents are projecting growth over the next 12 months, compared to 61 per cent from Q3 2016. For profits, 57 per cent of those surveyed anticipate an increase, consistent with the third quarter.

Turning to employee numbers, 38 per cent of those surveyed predict growth at their company, similar to the previous quarter. Forty-one per cent of the respondents anticipate no change in employee numbers while 21 per cent expect a drop.

The top three responses in terms of company priorities heading into 2017 were: Improving productivity, reducing costs and increasing sales within Canada.

Methodology
The CPA Canada Business Monitor is issued quarterly, based on a survey commissioned by CPA Canada and conducted by Harris Poll. The report draws upon business insights of professional accountants in leadership positions in privately and publicly held companies.

For the Q4 2016 study, emailed surveys were completed by 514 of 5,228 identified by CPA Canada as holding senior positions in industry (CFOs, CEOs, COOs and other leadership roles). The response rate was 13 per cent, with a margin of error associated with this type of study at ±4.1 per cent, with a confidence level of 95 per cent. Further information regarding response rate calculations can be found in the survey’s background document. The survey was conducted from November 25 to December 18, 2016.

A background document is available online at cpacanada.ca/businessmonitor.

About CPA Canada

The new Canadian designation, Chartered Professional Accountant (CPA), is now used by Canada’s accounting profession across the country. The profession’s national body, Chartered Professional Accountants of Canada (CPA Canada), is one of the largest in the world with more than 200,000 members, both at home and abroad. The Canadian CPA was created with the unification of three legacy accounting designations (CA, CGA and CMA). CPAs are valued for their financial and tax expertise, strategic thinking, business insight, management skills and leadership. CPA Canada conducts research into current and emerging business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. CPA Canada also issues guidance and thought leadership on a variety of technical matters, publishes professional literature and develops education and professional certification programs. cpacanada.ca

For more information, contact:

Tobin Lambie
Principal, Media
CPA Canada
Tel: 416-204-3228
Cell: 647-302-3761
Email: tlambie@cpacanada.ca

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