Protectionism and economic uncertainty tests C-Suite optimism
Chartered Professional Accountants study finds down 14% in Q1 over the previous quarter.
TORONTO — Optimism about the economy among Canadian senior executives slid in the first quarter of the year amid concerns about protectionism and economic uncertainty, according to a new report by the Chartered Professional Accountants of Canada.
The Q1 Canada Business Monitor found optimism among C-suite executives and other business leaders dropped to 34% from 48% in Q4 of 2017, its lowest level since 2016.
More than two-thirds (67%) of respondents described Canada as a less competitive place to invest and do business than the US compared to one year ago.
The cited the top three challenges to the Canadian economy as US trade protectionism (30%), uncertainty in the Canadian economy (16%) and US tax reforms (7%).
“Uncertainty is dominating, especially with growing protectionist trade sentiments and tax changes in the US,” says Joy Thomas, president and CEO, CPA Canada. “Canadian business leaders are looking for assurance from the federal government that the situation is being properly monitored to allow a course of action to be developed that will keep Canada competitive.”
Most of the executives (84%) say a detailed analysis of US tax reforms to assess the potential impact on Canada is urgently needed. And 82% report were disappointed the government did not set a date for a return to balanced budget.
Factors impacting business planning over the next year include uncertainty surrounding the Canadian economy (32%), employee retention, acquisition and development (30%) and lack of skilled workers (24%).
Over two thirds (69%) of executives are projecting revenue growth over the next 12 months and 63% anticipate an increase in profits, both similar to last quarter.
Forty-four per cent predict employee growth at their company while 38% anticipate no change and18% expect a drop.
The Q1 2018 study was completed by 408 business leaders with a margin of error of ±4.8%, and a confidence level of 95%.