Pessimism falls but economic reservations remain: CPA Canada Business Monitor

TORONTO, May 6, 2016 /CNW/ - Many professional accountants in leadership positions continue to have reservations about the national economy despite a sharp drop in economic pessimism, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).

The latest CPA Canada Business Monitor (Q1 2016), finds almost a third (31 per cent) of the business leaders surveyed remain pessimistic about how the economy will perform over the next 12 months, down significantly from 50 per cent in the fourth quarter of 2015.

However, the substantial drop in pessimism is not translating into widespread optimism. Nearly half of the survey's participants (47 per cent) emerged from the opening quarter of 2016 feeling neutral about the economy's prospects. Optimism among the business leaders is up slightly, climbing to 22 per cent in the newest research compared to 13 per cent in the final quarter of 2015.

"The economic picture remains blurred," says Joy Thomas, president and CEO, CPA Canada. "There are positive signals with the rise in optimism and the decline in pessimism but uncertainty lingers so it is understandable for many of the business leaders to be cautious and guarded when looking ahead."

Oil prices remain the biggest challenge to the Canadian economy cited by 39 per cent of survey participants. Uncertainty about the Canadian economy comes next referenced by 14 per cent of respondents.

Company specific

Company optimism comes out of the first quarter higher sitting at 45 per cent compared with 38 percent the previous quarter. These findings reveal how the respondents viewed the prospects for their own companies over the next 12 months.

Focusing on revenues, 59 per cent of the respondents are projecting growth over the next 12 months, compared with 51 per cent in Q4 2015.  For profits, 51 per cent of those surveyed anticipate an increase, basically unchanged from the previous quarter.

Turning to employee numbers, 35 per cent of those surveyed predict growth at their company, compared to 31 per cent last quarter. Thirty-six per cent of the respondents anticipated no change while 27 per cent expected a drop and the rest did not know.

Views on the U.S. economy

Almost half of the survey respondents (49 per cent) are optimistic about the outlook for the U.S. economy over the next 12 months. Only 12 per cent expressed pessimism. In addition, almost six-in-ten (57 per cent) of those surveyed viewed the current relationship between Canada and the U.S. on a political and diplomatic level as positive. Ten per cent called it negative. As for challenges to Canada and U.S. relations, the top three responses were: energy, trade tariffs and the environment.

Methodology

The CPA Canada Business Monitor is issued quarterly, based on a survey commissioned by CPA Canada and conducted by Harris Poll. The report draws upon business insights of professional accountants in leadership positions in privately and publicly held companies.

For the Q1 2016 study, emailed surveys were completed by 640 of 5,619 identified by CPA Canada as holding senior positions in industry (CFOs, CEOs, COOs and other leadership roles). The response rate was 15 per cent, with a margin of error associated with this type of study at ±3.9 per cent, with a confidence level of 95 per cent. Further information regarding response rate calculations can be found in the survey's background document. The survey was conducted from March 30 to April 14, 2016. A background document is available online at cpacanada.ca/businessmonitor.

About CPA Canada
The new Canadian designation, Chartered Professional Accountant (CPA), is now used by Canada's accounting profession across the country. The profession's national body, Chartered Professional Accountants of Canada (CPA Canada), is one of the largest in the world with more than 200,000 members, both at home and abroad. The Canadian CPA was created with the unification of three legacy accounting designations (CA, CGA and CMA). CPAs are valued for their financial and tax expertise, strategic thinking, business insight, management skills and leadership. CPA Canada conducts research into current and emerging business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. CPA Canada also issues guidance and thought leadership on a variety of technical matters, publishes professional literature and develops education and professional certification programs. cpacanada.ca

SOURCE CPA Canada

Image with caption: "CPA Canada Business Monitor (Q1 2016) (CNW Group/CPA Canada)". Image available at: http://photos.newswire.ca/images/download/20160506_C4032_PHOTO_EN_683983.jpg

For further information: Tobin Lambie, Principal, Media, CPA Canada, T: 416-204-3228, C: 647-302-3761, [e-mail]; Diana Sorace, Manager, Media Relations, CPA Canada, T: 604-694-6700, C: 604-551-4487, [e-mail]