The Economic Engine is Back Up and Running Again

Global Survey Shows Canadian Companies Have Put Post-Downturn Disciplines In the Driver's Seat For This Year and Beyond

MARKHAM, ON, May 11 /CNW/ - Adding to mounting evidence that the economy is in recovery mode, senior finance executives from around the world are optimistic about the year's economic outlook, albeit with a sense of discipline born out of the recession. In fact, 71 per cent of respondents worldwide-and a full 84 per cent in Canada-expect economic expansion in their countries over the next 12 months, the highest response to this question in three years, according to the results of a survey of 479 senior financial executives from around the world. The research was conducted by CFO Research Services in collaboration with American Express, marking the third annual American Express/CFO Research Global Business & Spending Monitor.

The survey explores how senior financial executives plan to help position their companies for future growth as the world economy improves, as well as the spending and investment decisions their companies are making to support their growth plans. Overall, Canadian responses to the survey questions are in line with the respondents' global counterparts, although there is a slight difference when it comes to expectations of when demand will rebound.

For example, two-thirds of all respondents (67%) indicated that they expect to see a sustained increase in demand for their companies' products and/or services by the third quarter of 2010. However, it appears that Canadian finance executives anticipate demand to recover sooner with 60 per cent expecting a sustained increase by this year's second quarter, and 77 per cent by the third quarter.

"After several quarters of uncertainty and doubt, it is encouraging to see Canadian companies regain footing, and do so confidently," said Rob McClean, Vice President and General Manager of Global Commercial Card at American Express Canada. "That said it's also important to note that business leaders have learned from the previous few years and are bringing important efficiencies along with them into this year. Heightened discipline has become business as usual for Canadian companies."

Post-Downturn Discipline

While there is a cautious optimism for the year ahead, the survey found that senior financial executives are looking closely at how the past few years have changed the way they do business. In Canada, 57 per cent of those surveyed indicated that the decisions made during the economic downturn have actually improved their companies' long-term prospects for success, closely in line with the rest of the world (66%).

Since the beginning of the economic downturn many companies have developed new metrics to measure a wide range of business dimensions. In Canada, the most successful of these newly implemented metrics included employee productivity measurement (64%) and supply chain management measurement (63%).

A majority (85%) of executives, worldwide, say that cost control will remain a long-term focus for their companies. They also indicate that their companies will take a generally conservative approach to investment over the next 12 months. Survey results show that companies are likely to distribute investment over a range of growth and efficiency initiatives as they pursue their objectives over the next year. In Canada, there is a somewhat greater interest in efficiency-related investments, compared with growth-oriented investments. In fact, 46 per cent of respondents in Canada say they plan to invest in improving production process efficiency and 40 per cent say they plan to improve administrative process efficiency, compared with growth-oriented categories-27 per cent plan to invest in the development of new products and services, and 30 per cent plan to invest in expanding market access.

"It is interesting to note that this focus on discipline isn't fleeting," said McClean. "The survey shows that 73 per cent of respondents based in Canada expect their companies' current cash and working capital discipline to remain intact over the next two years. In a separate survey question, 83 per cent of Canadians surveyed say their companies intend to keep tightly focused on their core businesses over this period of time. It's clear that lessons have been learned, and that companies are determined not to forget them."

Employment Upswing on the Horizon

While half of Canadian companies surveyed reported a decrease in their companies' headcounts since January 2009, nearly three quarters (73%) plan to increase headcount this year, with many already in the process of doing so. However, the survey results suggest that companies may be reevaluating their staffing requirements following the labour-market disruption, demonstrating a general sense of cautious optimism. Only 17 per cent of Canadians (23% worldwide) are "very likely" to restore lost capabilities in the coming year. However, appears that Canadians are slightly more interested in expanding work capacity (20% say they are "very likely" to do so) or acquiring new expertise or experience (20% say they are "very likely" to do so.

In terms of paying for this planned talent, Canadian executives somewhat differ from the rest of the world. Internationally, 43 per cent of those surveyed expect to pay less for talent than in the previous economic expansion; however, in Canada only 23 per cent of those surveyed expect to do so. This suggests that respondents based in Canada expect skilled labour to become scarcer, or to remain stable, as economic prospects improve.

Business Travel Spending To Remain Stable

According to the survey, it appears that discipline will oversee the business travel category as well. Over the next 12 months, business travel spending will remain relatively stable when compared with last year; however, because business travel levels declined sharply in 2009, even though spending has stabilized, it has done so at a relatively low level.

In Canada, a third of those surveyed indicated that they expect business travel to stay the same over the next year, and are slightly less likely to say they expect their companies will increase business travel spending over the next year (17%), when compared with all respondents (26%).

And while spending will likely remain stable when it comes to business travel, it appears that the pressure to further restrict travel is beginning to ease. Across most business travel categories, Canadian respondents indicated they are likely to maintain their current travel spending policies over the next year, but are particularly likely to say their companies will further restrict discretionary forms of travel: trips to attend conferences and retreats (47%).

Other Interesting Survey Findings:

    -   Respondents based in Canada are somewhat more likely to say their
        companies will focus more on profitability (60%) compared to top-line
        growth (40%) over the next 12 months
    -   In line with survey results from around the world, Canadian survey
        respondents indicate that capital spending in Canada is likely to
        remain stable over the next 12 months (27%)
    -   Respondents in Canada plan to increase spending on computer
        hardware (23%), labour/headcount (23%) and transportation/logistics
        services (20%)

About the Survey

In late February 2010, CFO Research Services surveyed 479 senior finance executives at large and global companies across a wide range of industries in Canada, the United States, Mexico, Europe, Asia and Australia. Company revenues ranged from $500 million to more than $20 billion. The survey explores companies' investment priorities and spending plans over the next 12 months, as well as how their strategic priorities have shifted in light of the current economic environment. These results are among the findings of the CFO Research Services study, which includes the survey and interviews with senior executives at large companies around the world. CFO Research's full report on the results of this program will be published May 2010.

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 Cards in Canada. Amex Canada Inc. operates the Corporate Travel, Travel Services Network 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.

About CFO Research Services

CFO Research Services is the sponsored research group within CFO Publishing LLC., which publishes CFO magazine.

SOURCE American Express

For further information: For further information: Jessica Myers, American Express Canada, (905) 474-8792,; Danna Barak, For American Express Canada, (416) 644-2259,

Organization Profile

American Express

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890