TORONTO, March 8, 2013 /CNW/ - Optimism about the national economy is down among Canada's executive chartered accountants for the second straight quarter, according to the latest CICA Business Monitor (Q1 2013).
Only 26 per cent of those surveyed in the first quarter of 2013 are optimistic about how the Canadian economy will perform over the next 12 months. That is down from 31 per cent in the final quarter of 2012 and from 34 per cent in Q3 2012. Most respondents are neutral or taking a wait and see approach (64 per cent) while 11 per cent are pessimistic about what lies ahead for the economy.
Forty-four per cent of the respondents believe the state of the U.S. economy is the strongest challenge to economic growth in Canada. Uncertainty surrounding the Canadian economy and consumer confidence both rank second at 12 per cent. It is worth noting that just seven per cent of respondents cited the European debt crisis.
"Uncertainty both at home and south of border is reflected in the survey findings," says Kevin Dancey, FCPA, FCA, president and CEO, Canadian Institute of Chartered Accountants (CICA)*. "Clearly, most of the executives are waiting for a clearer picture to emerge."
Just like with the national economy, the executive CAs surveyed are less optimistic about how their companies will perform over the next 12 months. Forty-six per cent of the respondents are optimistic compared with 56 per cent in Q4 2012.
"Company optimism generally runs ahead of economic optimism in our research," explains Dancey. "The executives have the best read on their own operations."
Despite the dip in company optimism, some encouraging projections are emerging. Seventy per cent of respondents expect their revenues to increase in the next year and 63 per cent are forecasting an increase in profits.
Turning to employment forecasts, 39 per cent of the respondents expect the number of employees at their companies to increase in the next year. Forty-one per cent anticipate no change and only 19 per cent expect a drop in employment numbers.
There also is good news for university and college graduates. Twenty-one per cent of the respondents anticipate that their company will increase the number of graduates hired, 59 per cent expect no change and only seven per cent are forecasting a decrease. The remainder either does not know or the hiring of post-secondary graduates does not apply to their organization.
The executive CAs ranked improving productivity, reducing costs, increasing sales domestically and employee training and skill development as being most important for their companies in 2013.
The CICA Business Monitor is issued quarterly, based on a survey commissioned by the CICA. The report draws upon business insights of Canadian CAs (including Quebec CPA, CA and Ontario CPA, CA members) in leadership positions in privately and publicly held companies.
For the Q1 2013 study, emailed surveys were completed by 226 of 4,277 identified by the CICA as holding senior positions (CFOs, CEOs, COOs and other senior executive roles). The response rate was 5 per cent, with a margin of error associated with this type of study at ± 6.5 per cent, with a confidence level of 95 per cent. The survey was conducted by Harris/Decima Inc. from February 12 to 28, 2013. A background document is available online at www.cica.ca/businessmonitor.
* CICA and CMA Canada joined together January 1, 2013, to create CPA Canada as the national organization to support unification of the Canadian accounting profession under the CPA banner.
Chartered Accountants (CAs) are Canada's most valued, internationally recognized profession of leaders in senior management, advisory, financial, tax and assurance roles. Through their integrity, expertise, and internationally recognized qualification standards, Canada's 83,000 CAs sustain their influence and leadership position both in Canada and globally. As trusted business advisors to Canadian organizations of all sizes, Canada's CAs foster confidence in Canadian business and contribute to the health and sustainability of Canada's capital markets and economy. The Canadian Institute of Chartered Accountants (CICA) represents Canada's CA profession both nationally and internationally. The CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA).
About CPA Canada
CPA Canada is the national organization representing the Chartered Professional Accountant (CPA) profession in Canada. The Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada) created the organization on January 1, 2013, to support unification of the Canadian accounting profession under the CPA banner. CPAs will serve the public interest across all sectors of the economy with integrity, sound ethical practices, disciplined regulation and proven strategic management and financial expertise. Accounting bodies representing over 80 per cent of Canada's professional accountants are committed to unification or have already merged under the CPA banner.
SOURCE Canadian Institute of Chartered Accountants