Optimism about the Canadian economy continues to slide: CPA

According to the Chartered Professional Accountants of Canada (CPA Canada) Business Monitor (Q3 2022) survey, only nine per cent of respondents are optimistic about prospects for the national economy over the next 12 months, a considerable drop from 52 per cent in Q3 2021.

“Canadian business leaders expressed decreased optimism in their business outlook, with hiring plans being negatively impacted,” said David-Alexandre Brassard, CPA Canada’s chief economist. “Our results show only 37 per cent believe they will have more employees one year from now, compared to 52 per cent last year.”

The report draws upon business insights of professional accountants in leadership positions in privately and publicly held companies.

The report’s key findings include:

• 21 per cent cited inflation as the top challenge to the growth of the economy. Increases in interest rates (16 per cent) and the state of the global economy (15 per cent) were the next most common challenges listed;
• When asked about their own companies, nearly three quarters of respondents indicated that inflation is hurting their business (72 per cent), with a total of 37 per cent of respondents believing that inflation would impact their company for at least another year;
• The proportion of respondents who are optimistic regarding their business over the next 12 months also dropped, from 70 per cent in Q3 2021 to 40 per cent this quarter. The news wasn’t much better for other key business metrics – all have dropped on a year-over-year basis:

• 51 per cent of respondents expect their company’s revenues to increase in the next year, down from 74 per cent in the third quarter of 2021.
• 42 per cent expect increases in profits, a decrease of 20 percentage points from last year;
• In addition, respondents indicated challenges continue with supply chains with almost two thirds (63 per cent) reporting an impact on product availability and just over half (52 per cent) experiencing limited ability to deliver to clients on time.

Further information can be found in the survey’s background document, which is available online at cpacanada.ca/businessmonitorQ32022.

(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)