Optimism about the Canadian economy remains at its highest level in the quarterly survey since the first quarter of 2011. More than half (56 per cent) of those surveyed in the second quarter of 2014 are optimistic about the prospects for the economy over the next 12 months. That is basically unchanged from the first quarter of the year. Only six per cent of the respondents are pessimistic while 38 per cent are neutral.
Almost half (48 per cent) of those surveyed are forecasting a growth in employee numbers at their companies in the year ahead, up from 43 per cent in the previous quarter. Thirty-nine per cent of the respondents predict no change, 12 per cent expect a drop and one per cent do not know.
There also are positive projections for revenues and profits. Seventy-three per cent of respondents expect their revenues to grow in the next year (identical to Q1) and 69 per cent (66 per cent in Q1) are forecasting an increase in profits. In addition, the majority of respondents continue to like the prospects of their own company over the next 12 months. Sixty-six per cent are optimistic compared with 62 per cent in the first quarter of 2014.
"Clearly, the findings offer hope for a strengthening Canadian economy," says Kevin Dancey, FCPA, FCA, president and CEO, Chartered Professional Accountants of Canada (CPA Canada). "It is particularly encouraging to see economic optimism holding steady at an elevated level but it has only been for two quarters. It's too early to determine if we are on a path to sustained economic recovery."
Challenges
When it comes to challenges facing the Canadian economy, the survey respondents believe international markets pose the greatest threat. The state of the U.S. economy is viewed as the biggest challenge cited by 30 per cent of respondents. It is followed by the rest of the global economy referenced by 12 per cent of those surveyed.
Bank of Canada
Bank of Canada governor Stephen Poloz has been in the position for just over a year now. The majority of professional accountants surveyed (71 per cent) believe that Canadian business has become more comfortable with Poloz as governor since he assumed the post. Twenty-nine per cent of respondents feel Canadian business is less comfortable.
"The fact that Mr. Poloz did not come in and shake things up likely contributes to the viewpoint of growing comfort," explains Dancey.
The CPA Canada Business Monitor is issued quarterly, based on a survey commissioned by CPA Canada. The report draws upon business insights of professional accountants in leadership positions in privately and publicly held companies.
For the Q2 2014 study, emailed surveys were completed by 742 of 6,267 identified by CPA Canada as holding senior positions (CFOs, CEOs, COOs and other leadership roles). The response rate was 11.8 per cent, with a margin of error associated with this type of study at ±3.6 per cent, with a confidence level of 95 per cent. The survey was conducted by Nielsen from June 11 to June 26, 2014. A background document is available online
here.
About CPA Canada
CPA Canada is the national organization established to support unification of the Canadian accounting profession under the Chartered Professional Accountant (CPA) designation. It was created by the Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada) to provide services to all CPA, CA, CGA and CMA accounting bodies that have unified or are committed to unification. As part of the unification effort, CPA Canada and the Certified General Accountants Association of Canada (CGA-Canada) are working toward integrating their operations this year. Unification will enhance the influence, relevance and contribution of the Canadian accounting profession both at home and internationally.
