Executives increase spending and investments to support top-line growth
according to new survey from American Express
TORONTO, June 19, 2013 /CNW/ - Optimism is on the rise when it comes to
economic growth, according to the sixth annual American Express/CFO Research Global Business & Spending Monitor. The Monitor, a survey of senior finance executives from the U.S.,
Europe, Canada, Latin America, Asia and Australia, found that fifty per
cent of Canada's finance executives plan to support top-line growth
this year, while improving profitability through modest spending and
investment. Additionally, 31 per cent plan to increase real spending
and investment by more than 10 per cent, compared to only 17 per cent
of CFOs in the U.S.
The Monitor highlighted further differences between Canadian CFOs and
their U.S. counterparts when it comes to optimism. Only 9 per cent of
Canadian CFOs expect political gridlock and uncertainty to negatively
affect economic growth in Canada, compared to half (50%) of financial
executives in the U.S., who are bracing themselves for the effects
that the European recession and political uncertainty will have on
their economy. The confidence seen among Canadian executives appears to
be impacting their planning cycles as well, with nearly two thirds
(63%) of Canadian CFOs claiming they have not shortened their planning
horizon in response to increased market volatility in the past two
years. Another 47 per cent say it's unlikely for them to do so in the
"With many markets shortening their planning cycles in response to
political and economic conditions, it's extremely encouraging to this
level of confidence and optimism in our market," says Paul Parisi, Vice
President & General Manager, Global Corporate Payments, American
Express Canada. "The results indicate that Canadian CFOs are still
looking ahead at long term opportunities for growth and spending rather
than merely trying to survive in the short term."
There is also a strong indication that Canadian CFOs will focus on both
local and international expansion. The Monitor shows that over half of
Canadian finance executives (53%) will focus primarily on increasing
sales within the domestic market, yet the expansion into emerging
markets remains lucrative. Eighty four per cent of Canadian Finance
executives planning to expand global activities in the next year with
the majority expanding operations into China (56%), India (41%) and
Brazil (34%). Comparatively, more than a quarter (26%) of U.S.
executives do not plan to expand globally this year.
The evolving role of CFOs in Canada
As companies expand and grow, it appears that Canadian CFOs are taking a
more prominent and strategic role. Forty three per cent of Canadian
CFOs say the experience of the recent global economic downturn has
enhanced their influence within their respective organizations, with 44
per cent saying they have become more of a strategist when it comes to
decision making. Looking ahead, over half of the Canadian CFOs surveyed
believe that encouraging innovation will be their greatest contribution
to enabling growth over the next two years.
"Finance executives are taking the lessons learned in the downturn to
further shape their role in the company," says Parisi. "They are
looking at their business with a more strategic lens to ensure that
they are helping to lay the foundation for growth and innovation in
years to come."
A Global Snapshot
While Canadian finance executives up their spending and investments, the
prolonged economic recession is hampering enthusiasm in some other
developed markets. Spain and France had the lowest expectations for
economic growth at 39 per cent and 43 per cent respectively. In fact,
the European malaise is impacting Russia, which is considered an
emerging market, yet tracked more closely to its geographic neighbours,
likely due to economic ties with euro zone members. Rather than sharing
the optimism of their fellow emerging economies, only 39 per cent of
those executives predict growth for Russia.
Senior financial executives in emerging markets see the most robust
opportunities for growth over the next 12 months with 75 per cent
predicting economic expansion in their respective countries. Several
emerging markets surveyed reported exuberant expectations for economic
100 per cent of respondents in Brazil
94 per cent of respondents in China
81 per cent of respondents in Mexico
78 per cent of respondents in India
The consensus for growth in Brazil is remarkable. However, perhaps due
to recent concerns about inflation and lagging production, Brazilian
executives appear to be adjusting planning horizons. 81 per cent say
they are likely to shorten their planning cycles in response to
increased market volatility.
"Despite the European recession, we're seeing a blend of overall
optimism regarding the economy," said Parisi. "As we increase
investments in booming emerging markets we're offsetting economic
uncertainty in Europe, giving Canadian executives the confidence to
plan for growth long-term."
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. 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(r) Gold Rewards
Card, and the American Express(r) AeroplanPlus(r) 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 atFacebook.com/AmericanExpressCanada.
About CFO Research Services
CFO Research Services 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 finance executives.
SOURCE: American Express
For further information:
On behalf of American Express Canada
On behalf of American Express Canada