Canadian CEOs feeling more confident about domestic economy

CEOs in Canada are much more confident about the country’s growth prospects than they were six months ago, according to the latest KPMG Global CEO Outlook pulse survey, which polled 500 chief executives in 11 countries.

A sizeable 81% of Canadian CEOS are confident in the three-year growth prospects of Canada – up drastically from 48% six months ago, when the world was still deep in the Covid-19 pandemic crisis.

"While the economy is not yet back where we need it to be, recent reports on job and GDP growth indicate a full rebound may come earlier than expected,” said Elio Luongo, president and senior partner, KPMG Canada. “This would especially be good news for the small- and medium-sized enterprise business owners who have been hit the hardest."

Canada’s unemployment rate in February (8.2%) was its lowest level since March 2020.

A previous survey from KPMG noted that most Canadians would prefer a Canada-first economic recovery plan, which would include incentives to “buy Canadian” and for corporations to allocate a share of their contracts to Canadian SMEs.

CEOs in Canada are also optimistic about their companies’ three-year growth prospects, with 86% predicting per annum earnings growth of 2.5%. That’s up slightly from 84% six months ago.

Canadian leaders, however, along with their global peers, are more pessimistic about growth prospects for the global economy. Confidence in global economic growth is nearly 20 points lower than at any point since 2017, falling to 42% from 68% in January 2020.

Permanent changes

Approximately two in five (43%) Canadian CEOs say the pandemic has permanently changed their business, almost double the amount of global CEOs (22%). Many are reconsidering their physical footprint, with 48% of Canadian leaders expecting a majority of their employees to work remotely between two-to-three days per week (versus 29% globally). This opens the option of smaller and more flexible office spaces.

In line with a greater emphasis on remote work, 62% of Canadian chief executives will continue to expand their use of digital collaboration and communication tools (61% globally).

Top threats

Canadian CEOs believe that climate change poses the greatest threat to their growth prospects over the next three years. It was also identified as the top threat in 2020 by Canadian leaders.

Global leaders, in contrast, listed cybersecurity at the top threat to growth prospects in the next three years, while Canadian CEOs identified as the fourth greatest concern.

Canadian CEOs tagged emerging technologies and supply chain disruptions as the second and third largest threats, respectively.