Canadian CEOs more optimistic than global peers: KPMG
Growing recognition for emerging digital technologies to accelerate growth and drive resilience
TORONTO — Canadian CEOs are more optimistic about the future than their global counterparts, despite the coronavirus pandemic, rising geopolitical trade tensions and emerging disruptive technologies, finds KPMG’s latest Global CEO Outlook.
The global advisory firm conducted two surveys, one at the onset of the pandemic in January and the other, a pulse check from late July into early August.
The report finds that only 12% of Canadian CEOs are significantly or moderately less confident than in January, compared to 29% globally, and 40% remain as confident as they did pre-pandemic, versus 26% of global CEOs.
Canadian CEOs are also much or moderately more confident in the three-year growth prospects for their country (48% vs. 45% globally), their industry (56% vs. 55% globally), and their company (84% vs. 67% globally).
“The actions taken in Canada to flatten the COVID-19 curve and keep cases fairly subdued means that CEOs here feel more assured than their global peers that our national economy will not collapse,” said Stephanie Terrill, business unit leader, management consulting at KPMG in Canada.
She said CEOs also feel more bullish about the prospects of their own firms and are accelerating their investments in digital technologies, reflecting the need to find new ways of working and problem solving going forward.
Statistics Canada reported that the Canadian economy grew by 6.5% in June, reflecting the easing of COVID-19 restrictions. For the second quarter, economic output contracted by 38.7%, the largest decline on record.
The recovery though remains fragile. Terrill notes that Canadian CEOs said the greatest threats to growth are territorialism and climate risks, which are not surprising given the economy’s heavy reliance on natural resources and export trade.
Business leaders in Canada also pointed to emerging technologies, talent risk, and cyber attacks as the top threats to growth prospects. Talent risk actually catapulted to No. 3 from the bottom quartile barely eight months earlier. Global CEOs are equally as concerned about losing employees or not being able to hire talent, but unlike in Canada, they called it their greatest threat to growth above all else.
Three quarters (76%) of Canadian CEOs agree that investing in disruptive technologies, such as artificial intelligence and automation, is critical to achieve long-term sustainable growth, compared to 72% globally.
Eighty-four per cent say they will now be prioritizing their technology investments to meet growth and transformation objectives, and the vast majority (92 per cent) say COVID-19 has accelerated the digitization of their operations.
The report finds that only 16% of CEOs feel in the last few months they’ve made years of progress in digitizing their operations, compared to 30%. Further, when it comes to developing new digital business models and revenue streams, a mere 4% of CEOs say they’ve accomplished years of progress in the last few months, compared to nearly 17% globally.
The KPMG survey includes perspectives from 75 Canadian CEOs, and is part of a global KPMG study including nearly 1,300 international CEOs.
The survey was initially conducted in January and February, before many key markets were beginning to feel the full impact of the pandemic crisis. A follow-up or pulse survey of 315 chief executives, including those in Canada, was conducted by KPMG International between July 6 and Aug. 5 to understand how CEO thinking has evolved during the crisis.
Nearly 40% of the Canadian CEOs who responded in the initial survey report annual revenues between $1 billion and $9.99 billion (51%, $500 million to $900 million) and 44% who responded in the follow-up survey report annual revenues of $10 billion or more (40%, $1 billion to $9.99 billion; 16% $500 million to $999 million).
The study represents CEOs of companies from energy, banking, consumer and retail, insurance, asset management, infrastructure, automotive, telecommunications, life sciences, manufacturing and technology.
This is an edited version of a longer article provided by KPMG in Canada.