Outlook remains positive but sees a slight decline from three-year high in July
TORONTO, 7 November 2017 – YPO, the premier chief executive leadership organisation in the world, announced today that the YPO Global Pulse Confidence Index for Canada slipped 1.1 points to 61.8 in the third quarter of the year (3Q 2017), having reached a three-year high of 62.9 in the second quarter.
However, confidence among chief executives in Canada remains strong, and broadly in line with the overall global composite score of 62.4, reflecting improved commodity prices and strong employment figures. Canada’s impressive economic performance saw the International Monetary Fund (IMF) has raise its estimate for GDP growth in Canada this year to 3.0%, the strongest anticipated out of the Group of Seven (G7) nations.
“Once again, Canadian business leaders are relatively confident about the stability and future direction of the country’s economy. While we’ve seen a marginal drop in confidence this quarter, the overall picture is still very healthy, and chief executives are rightly positive about the potential for significant growth in the short to medium term,” said YPO member and CEO of Arrivals & Departures Paul Leblanc.
“They will be keen to press on with their strategic plans while conditions are so favourable, but they will be keeping a close eye on economic performance indicators in the region and globally, and monitoring progress in the ongoing North American Free Trade Agreement (NAFTA) negotiations,” said Leblanc.
Key findings in Canada
The majority (55%) of respondents in Canada felt that business conditions had improved in the previous six months, while 18% believed that the economic climate had worsened. Looking ahead six months, less than half (44%) of respondents expected the economic environment to improve, and 36% felt that economic conditions would remain on par. Interestingly, 20% felt that conditions would worsen — a gloomier picture than in 2Q 2017, when only 9% expected a deterioration.
CEO’s remain bullish
There was little movement in the three key indicators of the YPO Global Pulse Index, which track sales, employment and fixed investment. Canadian respondents continued to be upbeat about prospects for their own organisations over the next 12 months, particularly when it came to revenue growth.
Sales confidence inched up 0.6 point to 69.4, its highest level for three years, as nearly three-quarters (73%) of respondents expected to increase revenues, compared with only 9% who forecast a decline in sale
The outlook for hiring was firmly positive, with 48% of respondents expecting staff numbers to remain steady, 43% expecting to increase staff numbers, and 9% felt that headcount would decline, a less optimistic picture than the previous quarter when only 2% predicted staff cuts.
Respondents remained bullish on fixed investment, with more than a third (36%) expecting to boost levels of investment, compared to only 7% who predicted reduced investment spend.
Globally, confidence remained steady at 62.4, now firmly in positive territory for four consecutive surveys, hovering between of 62.0 and 62.5. The United States is the most confident region at 63.5, while Australasia saw a 3.7-point decline to 63.3. In Europe the mood remains upbeat, as the European Union (EU) slipped slightly by 1.2 points to 61.8, and non-EU Europe edged down 1.7 points to 58.6. In Asia, confidence rose 1.3 points to 62.8, driven by an 8.8-point leap in China, and improved confidence in the Association of Southeast Asian Nations (ASEAN).
Elsewhere, confidence in Latin America jumped 2.8 points to 62.0, largely driven by Brazil’s 8-point hike in confidence. In Africa, the confidence edged up 1.2 points to 57.5, yet it remains the second least-confident region, trailed only by the Middle East and North Africa (MENA) region, where confidence increased 2.5 points to 53.2.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of October 2017, gathered answers from 925 YPO chief executive officers across the globe, including 43 in Canada. Go here for more information about the survey methodology and results from around the world.
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