CFOs remain positive about national economy, industry

74 per cent hiring, up from 63 per cent in first quarter: Survey
||Last Updated: 11/12/2012

Canadian CFOs of middle-market companies remain positive about the state of their own industry and the strength of the national economy in the third quarter, according to a GE Capital survey.

More than one-third (38 per cent) of CFOs think the national economy will grow over the next 12 months. Nearly one-half (48 per cent) think it will stay the same, although that's down three percentage points since the last survey conducted in the first quarter of 2012.

CFOs' top two immediate concerns are the potential impact of European fiscal conditions and the American economy, although worries about the latter declined by five percentage points since the first quarter.

Concerns about unemployment, oil prices and credit market liquidity also increased, found the survey of 203 CFOs of companies operating across five industries: energy; food, beverage and agribusiness; metals, mining and metals fabrication; retail; and transportation.

Over the next 12 months, CFOs expect labour costs to have the greatest impact on business performance, followed by costs for energy (including oil and gas) and materials, supplies and equipment.

"Despite a range of domestic and international concerns, Canadian CFOs still expect company growth over the next 12 months, which is very good news" said Katherine Lee, president and CEO of GE Capital's commercial lending and leasing business in Canada.

Despite a slight softening, nearly one-half of CFOs expect their businesses to grow moderately over the next one to three years while most CFOs expect increasing or stable profits in 2012.

Nearly three-quarters (74 per cent) said their companies have been hiring this year, up from 63 per cent in the first quarter of 2012. Seventy-three percent plan to hire over the next 12 months, down three points. The retail, energy and transportation industries are the most bullish in their hiring plans.

Companies conducting layoffs declined over the past 12 months, down six points to 33 per cent. Of companies that conducted layoffs, the size of the workforce reduction was up four points to 14 per cent.

Implementing service process improvements (55 per cent) and talent/leadership development (51 per cent) were cited as CFOs' biggest internal challenges in 2012.

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