TORONTO, Nov. 4, 2011 /CNW/ - The latest CICA/RBC Business Monitor finds
that despite increased pessimism about the Canadian economy among
executive CAs, only 27 per cent predict that Canada will slip into a
recession within the next six months.
Optimism about the national economy for the next 12 months is down
sharply among the respondents plummeting to 16 per cent in the third
quarter of 2011 compared with 43 per cent the previous quarter.
"Pessimism jumped by 20 per cent when compared with the previous quarter
but it is too soon to tell if this sentiment is an emerging trend,"
said Kevin Dancey, FCA, president and CEO, Canadian Institute of
Chartered Accountants (CICA). "While many executive CAs are
expressing a more pessimistic viewpoint, the majority of respondents
were actually neutral about the economy with 57 per cent essentially
taking a wait and see approach."
Executive CAs, however, are less optimistic about our neighbours to the
south, with 62 per cent saying the U.S. is heading for a recession
within the next six months. While 62 per cent of respondents believe
their businesses are prepared for a recession in Canada, 71 per cent
feel a U.S. recession would have a negative impact on their company.
Fifty-seven per cent say that the state of the American economy will
represent the strongest challenge to the growth of the Canadian
Those surveyed also are less buoyant about how their own company will
perform over the next 12 months when compared with the previous
quarter. Business optimism now sits at 48 per cent -- a 15 per cent
decline from Q2 and an eight percent drop when compared to the third
quarter of 2010.
"Canadian CAs appear to be taking proactive measures to prepare their
companies in the event of another recession," said Andrea Bolger, head,
Business Financial Services, RBC. "Many are improving efficiencies of
scale and building their cash reserves to avert any possible risks."
While revenue, profit and employee number projections dipped in Q3, the
forecasts for the next 12 months remain positive.
63 per cent of respondents expect that their revenues will increase,
down from 78 per cent last quarter. Forty one per cent expect revenues
to increase by 5 per cent or more.
57 per cent of respondents expect that their profits will increase, down
from 69 per cent last quarter. Thirty four per cent expect profits to
rise by 5 per cent or more.
41 per cent of respondents expect the number of employees to increase at
their companies, down 10 per cent from Q2. Eighteen per cent expect
to increase their employee count by five per cent or more, but 42 per
cent of respondents do not anticipate any changes.
The CICA/RBC Business Monitor is issued quarterly, based on a survey commissioned by the CICA. The report draws upon business insights of CAs
in leadership positions in privately and publicly held companies across
For the Q3 2011 study, emailed surveys were completed by 380 CAs of
4,300 identified by the CICA as holding senior positions (CFOs, CEOs
and COOs). The response rate was 9 per cent, with a margin of error
associated with this type of study at ± 5.0 per cent, with a confidence
level of 95 per cent. The survey was conducted by Harris/Decima from
September 13 to 30, 2011. A background document is available online at
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 78,000 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).
RBC delivers a wide range of financial services through a variety of
channels to individuals, small and medium-sized businesses and
commercial clients, including deposit accounts, investments and mutual
funds, credit and debit cards, business and personal loans, and
residential and commercial mortgages. It is the personal and commercial
banking division of Royal Bank of Canada (RY on TSX and NYSE).
SOURCE Canadian Institute of Chartered Accountants
For further information:
Interviews with an official from the CICA can be arranged by contacting:
Tobin Lambie, CICA, (416) 204-3228 or firstname.lastname@example.org
Interviews can be arranged with an official from RBC by contacting:
Margie McNeil, (416) 388-3697 or email@example.com; or Elyse Lalonde, (416) 974-8810 or firstname.lastname@example.org