Despite economic concerns, Canadian CEOs are resilient and ready for growth

Growing sense of preparedness and a surprising optimism amongst Canadian CEOs and their global peers

TORONTO, Jan. 24, 2012 /CNW/ - Nearly half (48%) of the 1258 CEOs polled worldwide believe the global economy will decline even further in the next 12 months, according to PwC's 15th Annual Global CEO Survey. Just 15% said the global economy will improve during 2012. The outlook was almost identical for the 130 Canadian CEOs who responded to this year's survey, with 48% seeing a decline over the next year and only 13% believing the market will improve.

However, Canadian CEOs believe their organizations have been less affected by global turmoil than leaders in other countries. For instance, while the sovereign debt crisis was cited as the key global issue to affect Canadian businesses, a reduced number of Canadian CEOs (38%) said the crisis had an impact on their operations this year compared to 56% of CEOs globally. Similarly this held true for other significant global events, including the Japan earthquake and nuclear crisis (18% compared to 29% globally) and the political upheaval in Arab economies (14% compared to 21% globally).

"In general, CEOs in Canada believe their companies have greater resilience and growth prospects than their global peers," says Gino Scapillati, PwC's National Managing Partner, Markets. "Compared to other leaders, Canadian CEOs found their companies to be less affected financially by major 2011 crises events."

Moreover, 43% of Canadian CEOs said they are 'very confident' of revenue growth for their companies in the next 12 months (compared to 40% globally), down slightly from 50% last year - though still up from the 36% who were 'very confident' in 2010.

In addition, 56% of Canadian CEOs increased their headcount over the past 12 months while only 17% noted a decrease. More than half of Canadian CEOs expect to increase their headcount over the next 12 months (54%), slightly higher than leaders from the rest of the world (51%).

This doesn't mean Canadian CEOs aren't worried. Sixty-six per cent had some concern about uncertain or volatile economic growth (compared to 80% globally), 55% about government responses to fiscal deficits and debt burden (66% globally), 50% about instability in the capital markets (64% globally) and 46% about exchange rate volatility (58% globally).

As a result, 66% of Canadian CEOs plan to make changes to their strategy in the next 12 months (70% globally), driven primarily by customer demand (79%) and economic growth forecasts or uncertainty (74%). Competitive threats (72%) and the availability of talent (50%) were cited as other reasons, and more often by Canadian CEOs than other leaders (56% and 34% respectively).

"Canadian CEOs may be in a better position to adjust their business strategy and operations to face whatever comes their way because of greater economic stability compared to many of their counterparts around the world," says Scapillati.

Cost reduction remains a key focus for Canadian CEOs. Although last year only 55% of CEOs said they expected to initiate cost cutting measures in the next year, 82% of this year's respondents reported that they had in fact cut costs in the last 12 months. For the next 12 months, 66% of CEOs globally say they will cut costs compared to 73% in Canada.

Growth opportunities

Mergers and acquisitions (M&A) are seen as the best strategic growth opportunity by Canadian CEOs (25%), followed by new product or service development (23%). Globally the focus is on increasing market share in existing markets (30%) and similarly on new products and services (28%). Only 12% of CEOs globally saw M&A as the main opportunity for growth.

Interestingly, compared to their global counterparts, Canadian CEOs believe emerging markets are somewhat less important than developed markets to their company's prospects. Fifty-five per cent of Canadian CEOs disagreed that emerging markets are more important to their growth than developed economies, compared to 24% of CEOs globally.

Survey Methodology:

For PwC's 15th Annual Global CEO Survey, 1,258 interviews were conducted in 60 countries in the last quarter of 2011. In Canada, 130 CEOs were surveyed. 291 interviews were conducted in Western Europe, 440 in Asia Pacific, 150 in Latin America, 236 in North America, 88 in Central and Eastern Europe, and 53 in the Middle East & Africa.

The full survey report with supporting graphics can be downloaded at www.pwc.com/ca/ceosurvey. Copies are also available from the media contacts.

Follow the discussion on Twitter with #ceo_survey.

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For further information:

Kiran Chauhan
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David Rowney
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