The threat of a global economic slump hasn’t cooled the confidence of Canadian private companies, according to global consulting company PwC’s insights survey; in fact, they’re hotter than ever for growth and expansion.
TORONTO: The threat of a global economic slump hasn’t cooled the confidence of Canadian private companies, according to global consulting company PwC’s insights survey; in fact, they’re hotter than ever for growth and expansion.
On the other hand, manufacturers appear to be circumspect. Jayson Myers, president and CEO of Canadian Manufacturers & Exporters (CME), says customer demand from the US is weaker than exporters had expected earlier this year. As a result, manufacturers are holding back on hiring and investing to cope with fewer orders from the US.
Bank of Montreal economist Douglas Porter says Canadian exporters will face a twin challenge of a strong loonie and sluggish US customer demand. He predicts the loonie will likely remain close to parity in the next few months, which will restrain the manufacturing sector.
Yet the PWC survey, which polled leaders from a variety of industries, shows a general business confidence level that is at its highest since 2005, showing 82% of respondents striving for growth compared to 66% last year.
“Canadian private companies learned a lot through the recession about how to survive and they’ve repositioned their businesses to face the challenges. Having adapted to the new business reality, they are ready for whatever the markets throw at them, which accounts for the optimism,” says Tahir Ayub, Canadian leader of PwC’s Private Company Services practice.
However, many of the companies surveyed are more reserved with their expectations for growth. Only 10% were looking to aggressively grow by 15% or more, compared to 24% last year. When surveyed in June/July 2011, 83% said they expect their business to do a little or a lot better over the next 12 months. In September, the number dropped to 74%.
The respondents predict the top three issues over the next 12 months will be: competition (34%), profitability (29%), and labour shortages (26%).
Their top 10 priorities include: improving processes (47%); reducing costs of operations (46%); improving staff skills (39%); better targeting of customers (37%); staff retention (33%); expansion plans (30%); investing in IT (22%); strategy definition/evaluation (21%): collaboration/strategic alliance (21%); and increased R&D/innovation (19%).
The Business Insights Survey of Canadian Private Companies polled 306 leaders of Canadian private companies from a broad range of industries. In September, 135 of the original group participated in a follow-up survey.
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Files from Canadian Press