Chart source: CPA Canada
As low oil prices continue to batter the bottom lines of many Canadian companies, business leaders are more pessimistic about the near future than they have been in years.
CPA Canada’s 2015 third quarter business monitor report found 40% of all professional accountants in leadership roles feel pessimistic about the country’s economy and its outlook for the next 12 months. This is twice as high as last quarter, and the last time this negative sentiment was so widespread was in 2009.
Those leaders who feel optimistic about the next year dropped to 17%, down from 29% in Q2. The survey found 40% of respondents were neutral.
One year ago, in Q3 2014, 48% of those surveyed reported feeling optimistic.
“What a difference a year makes,” said CPA Canada president and CEO Kevin Dancey. “So far this year, pessimism levels have been higher than usual.
“However, more recently, there have been mixed indicators about where the Canadian economy is heading, including signals of growth, so it will be interesting to see what the next quarterly results reveal.”
CHART 1
Chart source: CPA Canada
The number one concern for the Canadian economy was the price of oil, with 38% of respondents choosing this as the biggest challenge over the next year. Uncertainty (15%) came in second spot.
Chart source: CPA Canada
Despite this pessimism, 57% of survey respondents expect revenue to grow over the next 12 months, and 51% expect profits to grow.
Chart source: CPA Canada
The results of the CPA survey contrast with the latest Business Outlook Survey from the Bank of Canada , released October 9, that found most businesses expect sales and investment to pick up over the next year. However, the Bank of Canada noted that those firms in the energy sector did not share this optimism.
