56% of Canadian executives believe economy is improving, up from 29% in October

Economic and employment growth driving confidence

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(Toronto, 8 May 2013) Optimism in the Canadian economy has spiked significantly over the last six months, according to EY’s latest Canadian Capital Confidence Barometer. Fifty-six percent of Canadian executives believe the country’s economy is improving, up from only 29% in October, with access to capital, employment growth and corporate earnings all showing positive gains.

“Our survey indicates that confidence in credit availability has rebounded significantly,” says Tony Ianni, Transaction Advisory Services Partner at EY. “In Canada, 45% of respondents reported access to capital is improving, up from only 20% 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.”

In Canada, 37% of survey respondents expect their business to create jobs and hire talent. And when it comes to growth strategies, while fewer Canadian companies expect to pursue an acquisition in the next 12 months (33%, down from 44% in October and 48% a year ago), they’re more likely to exploit technology and develop new markets and products than their US and global counterparts.

“The results show that Canadian companies remain cautious,” explains Ianni. “They’re focusing on their core assets, and taking a wait-and-see approach when it comes to mergers, acquisitions, sales and divestments.”

Accordingly, a supplemental survey shows 67% of Canadian respondents report that they’re 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,” says Ianni.

For those companies planning expansion, 83% expect it to come from existing markets.

Ianni adds, “Canadian businesses are assessing deal opportunities more rigorously. While they’re confident in the Canadian economy, they’re waiting to see what happens on the global scale.”

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About the survey
EY’s Capital Confidence Barometer is a survey of more than 1,600 senior executives from large companies around the world and across industry sectors. The Barometer’s objectives are to gauge corporate confidence in the economic outlook, understand boardroom priorities over the next 12 months and identify the emerging capital practices that will distinguish companies that build competitive advantage as the global economy continues to evolve. This is the eighth twice-yearly Barometer in the series, which began in November 2009.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 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 achieve their potential.

For more information, please visit ey.com/ca.

EY refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.