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Business Leaders Hesitant About Economy’s Prospects

Many business leaders hesitant about economy’s prospects – Plenty of uncertainty about the national economy lingers among professional accountants in leadership positions, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).

The latest CPA Canada Business Monitor (Q3 2016) finds that half (50 per cent) of those surveyed are neutral about the prospects for the Canadian economy over the next 12 months, a result similar to the previous quarter. In addition, pessimism continues to run ahead of optimism. More than a quarter (29 per cent) of the business leaders are pessimistic about what lies ahead for the Canadian economy while 21 per cent are optimistic. Both those findings are similar to Q2 2016.

For the eighth consecutive quarter, the price of oil is cited by the survey respondents as the number one challenge to growth of the Canadian economy. It was followed by the state of the U.S. economy.

“The upcoming U.S. election and the protectionist trade winds associated with it are likely factors contributing to doubt or hesitation here in Canada,” says Joy Thomas, president and CEO of CPA Canada. “Not only is the future unclear regarding trade policies with the U.S. but there are other challenges including Canada’s transition to a low-carbon economy and possible ramifications from the Brexit vote.”

Company specific

Business optimism sits at 47 per cent, consistent with the previous quarter. These findings reveal how the survey respondents view the prospects for their own companies over the next 12 months.

Focusing on revenues, 61 per cent of the respondents are projecting growth over the next 12 months, virtually unchanged from Q2 2016. For profits, 57 per cent of those surveyed anticipate an increase, consistent with the second quarter.

Turning to employee numbers, 36 per cent of those surveyed predict growth at their company, almost identical to the previous quarter. Thirty-nine per cent of the respondents anticipate no change while 23 per cent expect a drop.

Investing in innovation

The business leaders surveyed clearly recognize the importance of innovation in terms of remaining competitive.

An overwhelming majority of those surveyed (86 per cent) agree that innovation is important to the success of their company. Among the survey participants, the top priorities for significant innovation investment in the next 12 months are technology/software (with 38 per cent indicating significant investment is planned), process improvements (36 per cent) and products/services (30 per cent).

“In a fast-changing, competitive world, innovation investment plays a key role in creating high-quality jobs and growing our economy,” explains Thomas. “While there is clear recognition of the value of innovation, there is still room to grow investment.”

According to the survey, six-in-ten (61 per cent) of the business leaders say investing in innovation will be a priority over the next 12 months. Thomas is encouraged by the finding but adds “an escalation in the number of companies making innovation investment a priority would help to strengthen the prospects for the Canadian economy.”

A background document is available online at


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 Q3 2016 study, emailed surveys were completed by 548 of 5,131 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 ±4.2 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 September 19 to October 6.

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.

Chartered Professional Accountants of Canada (CPA Canada)

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