Annual study finds CFOs anticipate economic expansion and higher revenues over last year
TORONTO, March 24, 2015 /CNW/ - This year is shaping up to be one focused on growth and the development of new products and services, according to Canadian CFOs participating in the eighth annual American Express/CFO Research Global Business & Spending Monitor. While just a year ago 17 per cent of Canadian companies indicated a plan to increase their investment in developing new products or services, the survey uncovered that nearly two-thirds (60%) intend to do so this year. This number well outpaces other countries surveyed; Hong Kong came in second with 47 per cent intending to invest more in new products or services in 2015. These findings are based on a sampling of 565 senior finance and corporate executives located in North America (the United States and Canada), Europe, Latin America (including Mexico1), Asia and Australia.
Part of this increased focus on developing new products and services is likely due the fact that 63 per cent of Canadian CFOs reported higher revenues than a year ago, and 73 per cent expect to see economic expansion over the next 12 months. Additionally, 80 per cent of these Canadian finance executives predict these increased sales to occur here in North America, as opposed to other regions.
"For the past few years we've seen a show of optimism from Canadian CFOs, but this year it appears they're really putting action behind their intent," says Paul Parisi, Vice President & General Manager, Global Corporate Payments, American Express Canada. "We're seeing dramatically rising numbers in terms of investment, not only in new products and services, but in spend on sales and marketing activities. CFOs are seeing enough stability to push into new territories, and as such Canada's leading from a global perspective in some of these areas."
Reasons behind this increase in spending and investment include remaining competitive with other companies (80%), better meeting customer needs (70%) and entering new markets (70%).
Increasing Employment Rates Across Canada
Globally, the survey found that businesses are looking to fill jobs to improve both productivity and efficiency. The same holds true in Canada, with 44 per cent of CFOs believing the unemployment rate will drop across the country, and 37 per cent saying they will hire to match the growth of their revenue over the past year. And while 40 per cent of businesses are looking to hire employees with specialized skills, expertise and experience, the survey found that CFOs across Canada believe that there is a shortage of skilled workers (27 per cent) and labour workers (23 per cent).
1 In the Global Business and Spending Monitor, Mexico is grouped with the Latin American economic region due to economic similarities, rather than with the United States and Canada.
A Global Outlook
Contrary to Canadian CFOs, economic expansion predictions in Europe have plateaued compared to a year ago (67%, vs. 68% in 2014). However, at the country level, there are mixed responses—ranging from declines of varying degrees to an increase in Spain, where 81% expect economic expansion this year (up from 69% in 2014 and 44% in 2013). Respondents from France have lost confidence in their economy. Only 29 per cent of French executives believe France will enjoy positive economic growth in 2015—the lowest level by far of any country in the survey. Germany (67%, down from 74%) and Russia (55%, down from 62%) both experienced less dramatic declines.
India leads the world in economic confidence (94%, up from 86% in 2014) and is most likely to anticipate a rise in employment (78 per cent) over the next year, while China's confidence has dropped significantly since 2013 to 78 per cent (down from 94%). Executives from Hong Kong and Japan are below Canada in their anticipation of economic expansion (50% and 52% respectively).
Much like Canada, the number of financial leaders in Latin America predicting economic expansion for their region is at 75 per cent (compared to Canada's 73%). While Brazil has the most optimistic outlook in the region it has experienced a significant drop in confidence from two years ago (75%, down from 100% in 2013), yet is near the top of the list of countries anticipating a rise in employment (60 %). Expansion in Mexico has fallen off as well with 73 per cent expecting the economy to grow, down from 86 per cent in 2014.
Across the globe, business executives are divided in their optimism on their current economy. While countries like the United States, Canada, India and China continue to showcase steady optimism in their markets, France, Hong Kong and Japan have declined over the past year.
"It's an exciting time for Canada with 70 per cent of CFOs stating that our economy and the availability of capital will positively impact their company's growth," said Parisi. "With this kind of optimism, 2015 will be a year to watch in Canada and beyond."
About American Express Global Corporate Payments
American Express Corporate Payment Solutions provide the Corporate Card, Corporate Purchasing Solutions, and other expense management services to midsize companies and large corporations worldwide. In the U.S., American Express is a leading issuer of commercial cards, serving more than 70 percent of the Fortune 500, as well as tens of thousands of midsize companies. For more information, visit americanexpress.com/corporate.
About American Express in Canada
American Express in Canada operates as Amex Bank of Canada and Amex Canada Inc. Both are wholly owned subsidiaries of the New York based American Express Travel Related Services Company, Inc., the largest operating unit of the American Express Company. Amex Bank of Canada is the issuer of American Express charge and credit cards, with outstanding products like the American Express® Gold Rewards Card, and the American Express® AeroplanPlus® Gold Card. Amex Canada Inc. operates the Corporate Travel and Travellers Cheques divisions in Canada. American Express opened its first offices in Toronto and Hamilton in 1853 and now employs 3,700 Canadians coast-to-coast. For more information, visit AmericanExpress.ca or connect with us at Facebook.com/AmericanExpressCanada.
About CFO Research Services
CFO Research is the sponsored research group of CFO Publishing LLC, which produces CFO magazine, CFO.com, and CFO Conferences. CFO Publishing, a portfolio company of Seguin Partners, is the leading business-to-business media brand focused on the information needs of senior finance executives. CFO Publishing has long-standing relationships with more than 500,000 executives.
SOURCE American Express
For further information: Raneal Engineer, On behalf of American Express Canada, 416-644-2263, Raneal.Engineer@highroad.com