Some business leaders remain pessimistic about economy: CPA

Many professional accountants in leadership positions continue to have reservations about the national economy, despite a sharp drop in economic pessimism.

In fact, 31% of the business leaders remain pessimistic about how the economy will perform over the next 12 months, down significantly from 50% in the fourth quarter of 2015, finds a survey by Chartered Professional Accountants of Canada (CPA Canada).

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However, the substantial drop in pessimism is not translating into widespread optimism — 47% feel neutral about the economy’s prospects. Optimism among the business leaders is up slightly, climbing to 22% in the newest research compared to 13% in the final quarter of 2015.

“The economic picture remains blurred,” says Joy Thomas, president and CEO, CPA Canada. “There are positive signals with the rise in optimism and the decline in pessimism but uncertainty lingers so it is understandable for many of the business leaders to be cautious and guarded when looking ahead.”

Oil prices remain the biggest challenge to the Canadian economy, cited by 39% of survey participants. Uncertainty about the Canadian economy comes next, referenced by 14% of respondents.

Company specific

Company optimism comes out of the first quarter higher, sitting at 45% compared with 38% the previous quarter. These findings reveal how the respondents viewed the prospects for their own companies over the next 12 months.

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Focusing on revenues, 59% are projecting growth over the next 12 months, compared with 51% in Q4 2015. For profits, 51% anticipate an increase, basically unchanged from the previous quarter.

Turning to employee numbers, 35% predict growth at their company, compared to 31% last quarter; 36% anticipate no change, while 27% expect a drop.

Views on the U.S. economy

Almost half of the survey respondents (49%) are optimistic about the outlook for the U.S. economy over the next 12 months. Only 12% expressed pessimism. In addition, 57% view the current relationship between Canada and the U.S. on a political and diplomatic level as positive. Just 10% call it negative. As for challenges to Canada and U.S. relations, the top three responses were: energy, trade tariffs and the environment.

Staff

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