Although nearly one-half (48 per cent) of Canadian CEOs believe the global economy will decline even further in the next 12 months, they are optimistic about growth for 2012, according to a survey by PwC.
Canadian CEOs believe their organizations have been less affected by global turmoil than leaders in other countries. For instance, while the sovereign debt crisis was cited as the key global issue to affect Canadian businesses, 38 per cent of the 130 Canadian CEOs surveyed said the crisis had an impact on their operations this year, compared to 56 per cent of the 1,258 CEOs polled worldwide.
"In general, CEOs in Canada believe their companies have greater resilience and growth prospects than their global peers," said Gino Scapillati, PwC’s national managing partner, markets. "Compared to other leaders, Canadian CEOs found their companies to be less affected financially by major 2011 crises events."
Moreover, 43 per cent of Canadian CEOs said they are very confident of revenue growth for their companies in the next 12 months (compared to 40 per cent globally), down slightly from 50 per cent last year — though still up from the 36 per cent who were very confident in 2010, found PwC’s 15th Annual Global CEO Survey.
In addition, 56 per cent of Canadian CEOs increased their head count over the past 12 months while only 17 per cent noted a decrease. More than one-half of Canadian CEOs expect to increase their head count over the next 12 months (54 per cent), slightly higher than leaders from the rest of the world (51 per cent).
This doesn't mean Canadian CEOs aren't worried. Sixty-six per cent had some concern about uncertain or volatile economic growth (compared to 80 per cent globally), 55 per cent about government responses to fiscal deficits and debt burden (66 per cent globally), 50 per cent about instability in the capital markets (64 per cent globally) and 46 per cent about exchange rate volatility (58 per cent globally), according to the survey.
As a result, 66 per cent of Canadian CEOs plan to make changes to their strategy in the next 12 months (70 per cent globally), driven primarily by customer demand (79 per cent) and economic growth forecasts or uncertainty (74 per cent). Competitive threats (72 per cent) and the availability of talent (50 per cent) were cited as other reasons, and more often by Canadian CEOs than other leaders (56 per cent and 34 per cent, respectively), found the survey.
"Canadian CEOs may be in a better position to adjust their business strategy and operations to face whatever comes their way because of greater economic stability compared to many of their counterparts around the world," said Scapillati.
Cost reduction remains a key focus for Canadian CEOs. Although last year only 55 per cent of CEOs said they expected to initiate cost cutting measures in the next year, 82 per cent of this year's respondents reported that they had in fact cut costs in the last 12 months. For the next 12 months, 66 per cent of CEOs globally said they will cut costs compared to 73 per cent in Canada.
Mergers and acquisitions (M&A) are seen as the best strategic growth opportunity by Canadian CEOs (25 per cent), followed by new product or service development (23 per cent). Globally the focus is on increasing market share in existing markets (30 per cent) and similarly on new products and services (28 per cent). Only 12 per cent of CEOs globally saw M&A as the main opportunity for growth, found the survey.
Compared to their global counterparts, Canadian CEOs believe emerging markets are somewhat less important than developed markets to their company's prospects. Fifty-five per cent of Canadian CEOs disagreed that emerging markets are more important to their growth than developed economies, compared to 24 per cent of CEOs globally.
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