TORONTO, Aug. 12 /CNW/ - Corporate confidence in the Canadian economy is
barely registering, with only six per cent of executives saying they are more
confident than a year ago, according to respondents in the CICA/RBC Business
Monitor (Q2 2008) report released today. As well, boardroom optimism about the
economy has plunged to 23 per cent from 67 per cent over the past 12 months,
based on the report's quarterly survey of Chartered Accountants in executive
corporate positions across Canada.
Rising energy prices are a major factor, and the number of survey
respondents indicating that higher energy prices are of major, or moderate,
importance to their company climbed significantly (53 per cent vs. 39 per cent
in Q2 2007).
"A year ago, oil was selling for an average of $US 71.00 a barrel, gas
prices at the pumps were averaging $1.07, and the Canadian dollar was perched
at 94 cents US. It's been a tumultuous 12 months and that is reflected in the
drop in confidence and optimism levels of this latest report," explains
Shauneen Bruder, executive vice-president, RBC Business and Commercial
Banking. "The good news for businesses in Canada is that we're experiencing
rising export prices coupled with strong domestic demand for goods and
services. We also expect to see some positive effects from an improving U.S.
economy by year's end."
The widespread impact of gasoline and diesel prices on companies right
across Canada was evident in the fact that three-in-four respondents indicated
their companies have had to absorb either some (49 per cent) or all (25 per
cent) of rising energy costs. However, just under four-in-ten respondents in
companies facing higher energy costs say they have made operational changes in
response; these include changes in building operations, shipping/
logistics/vehicle usage and general cost reductions cited most frequently.
"With the upward trend in energy costs, sustained energy-cost management
is a key focus for all companies," said Kevin Dancey, FCA, CICA president and
CEO. "Well-run enterprises that both recognize the changing environment and
control these expenses can achieve a competitive advantage."
The CICA/RBC Business Monitor is issued quarterly, based on a survey
conducted by The Canadian Institute of Chartered Accountants (CICA). The
report draws upon business insights of CAs in leadership positions in
privately and publicly held companies across Canada. For this Q2 2008 report,
emailed surveys were completed by 443 CAs of 4,551 identified by CICA as
holding senior positions (CFOs, CEOs and COOs) in publicly or privately held
companies in Canada. The response rate was 11 per cent, with a margin of error
associated with this type of study at +/- 4.6 per cent, with a confidence
level of 95 per cent.
The CICA/RBC Business Monitor (Q2 2008) is part of an international
initiative. The American Institute of Certified Public Accountants (AICPA) in
the United States and the Institute of Chartered Accountants in England and
Wales (ICAEW) in the United Kingdom also undertake quarterly studies that tap
the insights of members in senior positions to provide a barometer of economic
activity in their nations and as a basis for future comparative analysis
across countries. The CICA/RBC Business Monitor (Q1 2008) is available online
The Canadian Institute of Chartered Accountants (CICA), together with the
provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants,
represents a membership of approximately 74,000 CAs and 10,000 students in
Canada and Bermuda. The CICA conducts research into current business issues
and supports the setting of accounting, auditing and assurance standards for
business, not-for-profit organizations and government. It issues guidance on
control and governance, publishes professional literature, develops continuing
education programs and represents the CA profession nationally and
internationally. CICA is a founding member of the International Federation of
Accountants (IFAC) and the Global Accounting Alliance (GAA).
About RBC Royal Bank
RBC Royal Bank 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. Through its focus on industry specialization, RBC
Business and Commercial Banking provides industry-specific financial and
business advice to help clients successfully start up, sustain, grow and
transition their businesses. RBC Royal Bank is the personal and commercial
banking division of Royal Bank of Canada (RY on TSX and NYSE).
For further information:
For further information: Interviews can be arranged with Kevin Dancey,
CICA president & CEO and/or selected CAs who responded to the survey, by
contacting: Mi Mi Tsui, CICA, (416) 204-3435 or c/o firstname.lastname@example.org;
Interviews can be arranged with Shauneen Bruder, executive vice-president, RBC
Business and Commercial Banking, by contacting: Janet Gibson-Eichner, (416)
974-7622 or c/o email@example.com