Optimism in the Canadian economy has spiked significantly over the last six months, according to Ernst & Young's latest Canadian Capital Confidence Barometer. Fifty-six per cent of Canadian executives believe the country's economy is improving, up from 29 per cent in October, with access to capital, employment growth and corporate earnings all showing positive gains.
"Confidence in credit availability has rebounded significantly," said Tony Ianni, transaction advisory services partner at Ernst & Young. "In Canada, 45 per cent of respondents reported access to capital is improving, up from only 20 per cent in October. This is good news because with access to capital, businesses are in a better position to create jobs, invest in innovation and implement plans to grow."
More than one-third (37 per cent) of the more than 1,600 senior executives surveyed expect their business to create jobs and hire talent.
And while fewer companies expect to pursue an acquisition in the next 12 months (33 per cent, down from 44 per cent in October and 48 per cent one year ago), they're more likely to exploit technology and develop new markets and products than their United States and global counterparts.
"Canadian companies remain cautious," said Ianni. "They're focusing on their core assets and taking a wait-and-see approach when it comes to mergers, acquisitions, sales and divestments."
A supplemental survey showed 67 per cent of Canadian respondents are worried about the effect of continuing uncertainty in the global economy on their business. However, while they plan to exercise caution over the next 12 months, they're optimistic about the longer term.
"More businesses report seeing expansion in the next 24 months, and even more in the next three years," said Ianni.
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