Executive CAs less optimistic about economy and own businesses: CICA Business Monitor
TORONTO, Aug. 23, 2012 /CNW/ - The U.S. economy and European debt crisis are the two biggest factors contributing to a sharp drop in optimism among Canadian executive Chartered Accountants according to the latest CICA Business Monitor (Q2 2012).
Roughly one in five (21 per cent) of the respondents surveyed for the second quarter report are optimistic about the outlook for the Canadian economy. That is down from 32 per cent in the first quarter of the year. Most of the respondents (62 per cent) remain neutral about the prospects for the national economy over the next 12 months.
The survey respondents believe the three biggest hurdles for growth in Canada are the state of the U.S. economy (37 per cent), the European debt crisis (28 per cent) and uncertainty surrounding the economy (18 per cent).
"There is growing concern about the Eurozone among the respondents," says Kevin Dancey, FCA, president and CEO, Canadian Institute of Chartered Accountants (CICA). "What impacts Europe, impacts the United States and impacts Canada. Apprehension is likely influencing the economic outlook of some of the business leaders surveyed."
Just like with the national economy, the executive CAs surveyed are not as optimistic about the prospects for their own companies over the coming year. Company optimism fell to 49 per cent in the second quarter report down from 57 per cent in the first quarter.
Most of those surveyed still expect revenues and profits to rise, and a significant number of respondents anticipate a climb in employment numbers at their company. The decline in optimism, however, is evident in lower projected revenue, profit and employment forecasts for the next 12 months.
Key highlights: Revenues, profits and employee numbers
Sixty-one per cent of executive CAs say their company's revenues will increase in the next year, down from the first quarter (67 per cent). Fifteen per cent expect to increase revenues by more than 10 per cent.
Fifty-five per cent of respondents expect their company's profits to increase in the next year, a dip from the 65 per cent recorded in Q1. Sixteen per cent expect an increase in profits of more than 10 per cent.
Forty-one per cent of respondents expect the number of employees at their companies to increase in the next year, down slightly when compared with the first quarter (44 per cent). Twenty-four per cent of respondents expect employment numbers to increase by less than five per cent. Just over four in 10 (43 per cent) do not anticipate any changes in employment numbers at their company; nine per cent anticipate employment numbers to jump by more than 10 per cent.
"The fact that so many of those surveyed expect employment numbers to either increase or hold steady represents a silver lining among the findings," says Dancey. "Optimism may be down but many Canadian companies appear poised to deal with possible economic turbulence over the coming months."
The CICA Business Monitor is issued quarterly, based on a survey commissioned by the CICA. The report draws upon business insights of Canadian CAs (including Quebec CPA, CA members) in leadership positions in privately and publicly held companies.
For the Q2 2012 study, emailed surveys were completed by 283 of 4,371 identified by the CICA as holding senior positions (CFOs, CEOs, COOs and other senior executive roles). The response rate was 6.4 per cent, with a margin of error associated with this type of study at ± 5.8, with a confidence level of 95 per cent. The survey was conducted by Harris/Decima Inc. from June 19 to July 9, 2012. A background document is available online at www.cica.ca/businessmonitor.
Chartered Accountants (CAs) are Canada's most valued, internationally recognized profession of leaders in senior management, advisory, financial, tax and assurance roles. Through their integrity, expertise, and internationally recognized qualification standards, Canada's 82,000 CAs sustain their influence and leadership position both in Canada and globally. As trusted business advisors to Canadian organizations of all sizes, Canada's CAs foster confidence in Canadian business and contribute to the health and sustainability of Canada's capital markets and economy. The Canadian Institute of Chartered Accountants (CICA) represents Canada's CA profession both nationally and internationally. The CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA).
SOURCE: Canadian Institute of Chartered AccountantsFor further information: