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Economic pessimism continues upward trend

Business leaders more confident about their own companies than Canadian economy: new CPA Canada survey

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bird's eye view of man walking street in rain with umbellaIn the latest CPA Canada Business Monitor survey, only 22 per cent of the respondents expressed optimism about the Canadian economy over the next 12 months (Getty Images/Alexander Spatari)

The latest CPA Canada Business Monitor survey (Q1 2019) found respondents were more optimistic about the economic prospects of their own companies than the Canadian economy as a whole.

In the survey of professional accountants occupying leadership roles that include CEOs, COOs and CFOs, almost half (49 per cent) of respondents said they’re optimistic about the prospects for their business over the next 12 months, while 62 per cent predict increased revenues and 55 per cent anticipate increased profits. Hiring sentiment has also risen as 42 per cent expect to increase the number of employees working for them, up from 39 per cent in the final quarter of 2018.

However, only 22 per cent expressed optimism about the Canadian economy over the next 12 months. That’s a decline from 26 per cent in the final quarter of 2018 and a sharp decline from 34 per cent at about this time last year

More respondents—47 per cent—moved into the neutral category, up from 39 per cent in the last quarter, while 31 per cent said they were pessimistic, down slightly from 35 per cent in the fourth quarter of 2018.

“Growing pessimism among Canada’s business leaders reflects the weakening near-term outlook for the Canadian economy,” says Joy Thomas, president and CEO of CPA Canada. “Economic growth has slowed significantly over the course of the last year and uncertainty in the global political landscape clearly continues to weigh on sentiment.”

A strong majority of respondents—80 per cent—expressed concern that the last federal budget did not include a timeline for balancing the books. More than half (53 per cent) said that a roadmap for a balanced budget would increase confidence among businesses.

With a Canadian federal election scheduled for October, business leaders continue to call on political parties to commit to a review of Canada’s tax system. Almost seven in 10 (68 per cent) of respondents want the issue to be reflected in official campaign platforms. 

“The evidence is clear that such a review would benefit many Canadians because it would lay the groundwork for the development of a tax system that’s simpler, fairer, more efficient and internationally competitive,” explains Thomas.

READ THE RESULTS

The CPA Canada Business Monitor, commissioned by CPA Canada and conducted by Nielsen, is issued quarterly. For the Q1 2019 study, emailed surveys were completed by 396 of 4,192 people identified as holding senior positions in industry between April 9 and April 26, 2019.