Canadian Firms Less Affected by Global Turmoil, CEOs Say

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The Globe and Mail Jan 24, 2012

Canadian CEOs believe their companies are more resilient and have been less affected by global economic turmoil than corporate leaders in other countries, according to a new global poll of chief executives.

Just 38 per cent of Canadian business leaders said they believe the sovereign debt crisis gripping many countries has had an impact on their operations this year, compared to 56 per cent of CEOs globally, according to a global poll of 1,258 CEOs by PricewaterhouseCoopers LLP. Canadian CEOs also reported being less affected by the earthquake and nuclear crisis in Japan and the political upheaval in Arab economies.

“In general, CEOs in Canada believe their companies have greater resilience and growth prospects than their global peers,” said Gino Scapillati, national managing partner of markets for PwC in Canada.

“Compared to other leaders, Canadian CEOs found their companies to be less affected financially by major 2011 crises events.”

The survey -- released Tuesday at the World Economic Forum in Davos -- found 40 per cent of CEOs globally reported being “very confident” of revenue growth in the next 12 months, while Canadian CEOs were slightly ahead of the global trend at 43 per cent. The number reflects a general decline in confidence, however, with 50 per cent of Canadian executives reporting being “very confident” of revenue growth in the same poll a year ago.

Two-thirds of Canadian CEOs said they had concerns about uncertain or volatile economic growth, compared to 80 per cent globally, while 55 per cent said they were concerned about government responses to fiscal deficits, compared to 66 per cent globally. A minority of Canadian top executives -- 46 per cent -- said they were worried about exchange rate volatility, compared to 58 per cent globally.

The survey found 66 per cent of Canadian CEOs anticipate making changes to their strategy in the next 12 months, driven primarily by customer demand and economic growth forecasts. Seventy-two per cent of CEOs cited competitive threats as a factor in their decision to change strategy, compared to 56 per cent globally, while 50 per cent said the availability of talent was also a factor, compared to just 34 per cent globally.

“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,” Mr. Scapillati said.

Cost reduction remains a key focus for Canadian CEOs. Seventy-three per cent of those polled said they expect to initiate cost-cutting measures in the coming year, higher than the global average of 66 per cent. More than 80 per cent of Canadian executives said they had cut costs in the prior 12 months.

However, the cost-cutting does not appear to mean simple staff reductions for many top executives. Only 17 per cent of CEOs in Canada said they had decreased their employee numbers in the past year, and 56 per cent said the number had increased. More than half also said they expected to increase hiring in the coming year.

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