(Toronto – 25 January 2010) Economic recovery is predicted for the second half of 2010 now that widespread downsizing is largely complete and access to capital is improving, reveals a new study of more than 200 senior financial executives, conducted by Canadian Financial Executives Research Foundation (CFERF), the research institute of FEI Canada, and sponsored by EY.
“Financial executives are bullish about their individual company performance throughout 2010,” said Michael Conway, chief executive and national president, FEI Canada. “Overall expectations for revenues and profit growth are positive, and companies will continue to focus on cost control, revenue growth and market and product expansion to help improve their bottom line.”
Released today, the study revealed that a majority of companies are expecting their revenues to grow throughout the year. While cost reduction remains an important factor to half of companies surveyed, only 13% anticipate downsizing their operations in 2010, with 30% reporting that they may be increasing staffing levels.
“We may be moving into the recovery phase, but senior leaders cannot afford to loosen the reins on their business,” said Eric Rawlinson, Partner, EY. “Decisions made now are critical to the success of any organization. Building on what we’ve learned from the crisis - and updating strategies accordingly - could mark the dividing line between businesses that thrive in the upturn, and those that falter.”
While 81% of financial executives reported that overall capital spending would fall short of 2008 levels, increases for 2010 are expected in five major areas including; new products and market expansion,technology and R&D, building cash positions, acquisitions and shareholder payouts. “With the return to economic prosperity in 2010, companies across the country are implementing a variety of strategies to ensure they are well positioned to capitalize on market opportunities,” said Ramona Dzinkowski, executive director, CFERF. “Survey respondents said that growing revenue, improving customer service and increasing the efficiency of their supply chain top the list of corporate objectives.”
Additional priorities include:
The study was conducted in fall 2009 and surveyed a wide range of Canadian company sizes in a variety of industry sectors.
About The Canadian Financial Executives Research Foundation (CFERF)
CFERF is the research institute of Financial Executives International Canada (FEI Canada), the all-industry professional membership association for senior financial executives that provides professional development, thought leadership and advocacy services to its 2000 members. CFERF’s primary objective is to study emerging financial management issues in Canada with the aim of increasing the competitive capabilities of Canadian companies across the country. Further information can be found at www.feicanada.org.
EY is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities to achieve their potential. For more information, please visit ey.com/ca.