Canadian chief executives are exhaling after years of economic turbulence, reporting growing optimism about the economy and the outlook for their businesses.
A survey of 1,300 global CEOs, including 120 in Canada, shows Canadian executives are more confident than they were a year ago, and are significantly more confident than many of their global counterparts.
The survey, conducted by PricewaterhouseCoopers LLC and released Tuesday at the World Economic Forum in Davos, found 42 per cent of Canadian CEOs are "very confident" about their company's prospects in the next 12 months, compared to 36 per cent globally, and an even larger 60 per cent are "very confident" about growth in the next three years compared to 46 per cent globally.
Only CEOs in emerging economies in Brazil, the Middle East and India were more confident than Canadians about revenue growth over the next three years, the survey found.
The findings appear to be a reflection of the relatively stronger Canadian economy which has not faced the same shocks as the U.S. economy nor the deep recession that has hit many countries in Europe, said Bill McFarland, chief executive officer of PWC Canada.
"Yes, we've gone along at reasonably low growth at 1 per cent or 2 per cent, and that's most likely to be our growth level over the next little while, but we haven't had the same bumps along the road as some of the other countries," he said in an interview.
The results show a marked improvement from the same survey a year ago, when 48 per cent of Canadian CEOs felt the global economy would worsen in 2012 and just 15 per cent thought it would improve. This year, 24 per cent predicted the economy would worsen in 2013 and 26 per cent thought it would improve. The remainder predicted the economy would stay the same.
On a global basis, 18 per cent of CEOs felt the economy will improve this year, while 28 per cent predicted a decline and 52 per cent felt it would be unchanged.
The optimism of Canadian CEOs is significant because they make critical decision about business strategy and hiring, Mr. McFarland said.
Almost two-thirds of Canada's top executives said they increased staffing levels last year compared with 48 per cent globally, while 52 per cent in Canada said they expect to increase head count this year compared with 45 per cent globally.
"I think it's a really positive news story for us that they're looking to stimulate the economy and build jobs," Mr. McFarland said. "I know certainly at PWC we're doing the same thing -- which is look at acquisitions, looking at catalyst hires, looking at new opportunities for new businesses that we might potentially get into. So the Canadian story is a lot stronger than in many other parts of the world."
Despite the hiring gains, however, 80 per cent of Canadian CEOs also said they had implemented cost-cutting measures in the past 12 months and 77 per cent said they expect to do so in 2013. Globally, 70 per cent of global respondents predicted they would cut costs this year.
While 62 per cent of CEOs globally cited potential tax increases as their greatest policy concern that threatens growth, Canadian CEOs said they were most concerned about finding workers with the right skills. Seventy-two per cent of Canadian CEOs said the government's top priority should to focus its efforts on creating a skilled work force.
Mr. McFarland said many countries are facing crippling budget deficits and there is a greater expectation that taxes will have to rise. In Canada, by comparison, there is less expectation of imminent tax increases, and more concern that young people are receiving educations that do not match to the greatest job needs.
Canadian executives are also more interested in seeking mergers or joint ventures in 2013 than their global peers, which Mr. McFarland said could be a reflection of a desire to seek growth from new markets outside of Canada.
The survey found 70 per cent of Canadian CEOS expected to enter into a new strategic alliance or joint venture this year, compared to 47 per cent globally. Three-quarters of those executives are targeting other companies in North America.