Canada’s accountants lack optimism about economy: CPA Canada survey
Uncertainty surrounding the Canadian economy is highlighted by Brexit worries, the U.S. economy and low jobs growth
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TORONTO—Professional accountants in leadership positions have reservations about how the national economy will perform over the next 12 months, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).
The latest CPA Canada Business Monitor finds lingering economic uncertainty at home while those surveyed also expressed concern about possible protectionist actions in the United States along with the fallout from the recent Brexit vote.
Just over half (53 per cent) of the business leaders surveyed are neutral about the prospects for the Canadian economy, up from 47 per cent in the opening quarter of 2016. More than a quarter (26 per cent) expressed a pessimistic viewpoint about what lies ahead economically while 21 per cent are optimistic.
Oil continued to lead the way for the seventh consecutive quarter as the number one challenge to the growth of the Canadian economy. It was followed by uncertainty surrounding the Canadian economy with the status of the global and U.S. economies close behind.
“The survey findings are not surprising as Canadian business leaders must confront challenges at home and brace for possible repercussions from elsewhere,” says Joy Thomas, president and CEO of CPA Canada. “Oil prices, a coming U.S. election and Brexit are all factors likely contributing to the wait and see approach.”
Impact of the Brexit vote
The professional accountants surveyed believe the Brexit vote will have ramifications both here in Canada and globally. Some findings:
- Seventy-two per cent believed it would have a negative impact on the global economy
- Forty per cent answered that there would be a negative impact on the Canadian economy
- Roughly three quarters (78 per cent) believe that negotiating a trade deal with the U.K. should be a priority for the Canadian government
- However, in terms of the Canadian/U.K. trading relationship, 63 per cent surveyed were not concerned this relationship would be hindered
Thoughts on the United States
Almost half (49 per cent) of the survey respondents believe the U.S. economy is growing (either moderately or considerably) with almost all of them saying moderately. Despite this finding, 45 per cent of those surveyed still only offered a neutral view for the prospects of the U.S. economy over the next 12 months. With a looming presidential election, roughly seven-in-ten (69 per cent) of the respondents are concerned that the new U.S. president, no matter who is elected, will enact more restrictive trade policies with Canada.
View from the ground
Business optimism sits at 46 per cent which is basically unchanged from the previous quarter. These findings reveal how the survey respondents viewed the prospects for their own companies over the next 12 months.
Focusing on revenues, 62 per cent of the respondents are projecting growth over the next 12 months, compared with 59 per cent in Q1 2016. For profits, 55 per cent of those surveyed anticipate an increase, compared to 51 per cent in the previous quarter.
Turning to employee numbers, 36 per cent of those surveyed predict growth at their company, almost identical to the year’s opening quarter. Thirty-eight per cent of the respondents anticipate no change while 25 per cent expect a drop.