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Just over five years ago Lehman Brothers fell, marking the symbolic beginning to the worldwide economic and financial collapse. How has the upper echelon of business fared since then?

It turns out that Canadian businesses remain as scarred and changed by the Great Recession as the citizens of Canada. The lessons executives have taken from the impact of the recession on their businesses are going to affect and shape the economy going forward.

Forty-two per cent of the top businesses in Canada say they have fully recovered from the recession of 2008. But 36 per cent say they have partially recovered, and 12 per cent say they have not recovered at all. Since none of us would consider partial recovery from an illness to be a complete victory, it is fair to say that almost half of businesses are operating at an impairment relative to 2007.

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This is most pronounced in the resource sector. Mining and oil and gas companies are struggling in the new credit era. Less than one-third of these companies say they have fully recovered from the recession.

Their problems are directly related to the availability of credit. Many companies are having trouble getting the credit they need, but it is a crisis in the resource sector. They are especially concerned about the volatility of equity markets – almost as much of a concern now as it was in the September, 2008 edition of the C-Suite survey.

For those companies, cash is scarcer now than it was in the depths of recession. Their plans for exploration and development are without oxygen. The manufacturing sector limps along, impeded by a different set of problems. Credit has improved for manufacturers since the recession. It remains true, as Willy Kruh, global chair of consumer markets at KPMG pointed out in a recent interview on BNN, that the availability of credit has not and is not likely to return to the pre-recession days for any element of the economy.

Manufacturing companies are suffering from lack of demand. Their challenge is the sluggish economy in both the U.S. and Canada. Slow job growth and even slower wage recovery has combined to drive consumers to the brink of the credit wall. Manufacturers need a stronger economy to charge consumer purchasing power. Those manufacturers that have more international reach report better prospects, but that is a small subset of Canadian manufacturing.

Lingering residue from the recession makes that recovery less likely. Executives learned two main lessons from the recession: spend less – especially on salaries – and be more risk-averse. The latter has been translated into a much more cautious approach to growth and capital investment. Hence, we have a recovery characterized by jobless growth and Mark Carney's "dead money."

The inevitable result is a flat economy as far as the eye can see. Among the top executives in Canadian business, exactly 1 per cent anticipate strong growth from the Canadian economy over the next 12 months. The number of top executives who expect their own businesses to grow strongly this year is at low levels by historic standards. We better hope the "creative" part of creative destruction kicks in soon.

David Herle is principal and Alex Swann is vice-president of Gandalf Group

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