Pessimism about national economy grows among business leaders

CPA Canada survey found concern about numerous external risks facing the economy

business economy pessimism

A new survey by the Chartered Professional Accountants of Canada says pessimism about the prospects of the national economy over the next 12 months is growing among Canadian business leaders.

The CPA Canada Business Monitor found that pessimism among the professional accountants jumped to 35 per cent in the fourth quarter of last year, which was up from 28 per cent in the previous quarter. A year ago, it was 16 per cent.

On the flip side, optimism was at 26 per cent, which was its lowest level since 2016 and down sharply from 48 per cent in the fourth quarter of 2017.

“Despite the recent spate of strong economic data, the sharp deterioration in economic sentiment highlights that Canada’s business leaders are rightly worried about the numerous external risks facing the economy,” said Joy Thomas, president and CEO of CPA Canada, in a statement.

“The government took several steps to improve business investment in the fall economic statement, but further actions can still be taken to strengthen Canada competitively and support sustainable economic growth. As optimism in the economy softens, Canadian business leaders are looking for a federal fiscal plan that charts a return to budgetary balance and addresses other factors contributing to economic uncertainty.

“Business executives are among the many groups wanting the government to signal its intention to review the country’s tax system; if not the government, then one of the other parties during the coming election.”

The top three challenges to the Canadian economy cited by survey participants are protectionist trade sentiment in U.S. (18 per cent), uncertainty surrounding the Canadian economy (15 per cent) and oil prices (12 per cent).

Here are some of the key findings from the survey:

  • company optimism is down to 49 per cent from 61 per cent a year ago;
  • 64 per cent foresee increased company revenues (72 per cent in quarter four 2017);
  • 57 per cent expect increased profits (64 per cent in quarter four 2017);
  • 39 per cent expect employee numbers to increase (50 per cent in quarter four 2017);
  • the top priorities cited by survey participants for their own businesses in 2019 are: increasing sales within Canada (21 per cent), reducing costs (16 per cent) and, tied at 13 per cent, attracting/retaining employees and improving productivity;
  • 77 per cent think the federal government should use the upcoming budget to set a date for a return to a balanced budget;
  • 58 per cent believe the promised review of Canada’s regulatory system made in the federal government’s fall economic update would be helpful;
  • 79 per cent think a comprehensive review of Canada’s tax system is required with 66 per cent calling for political parties to make prioritizing that review part of their 2019 federal election campaign platforms.

– Mario Toneguzzi for Calgary’s Business

business economy pessimism

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