Canadian CEOs less optimistic in 2019, PwC survey finds

Accounting and consulting firm PwC’s 22nd Global CEO survey has found that Canadian CEOs are less optimistic about their companies’ growth prospects, as well as the health of the global economy. 

Echoing the widespread belief that the business cycle is entering a recessionary phase, 62% of surveyed Canadian CEOs said global economic growth will decline or stay the same this year, compared to last year’s proportion of 28%, when the Canadian economy was riding high on 3% GDP growth and record low unemployment.

Following this pessimistic economic outlook, only 40% of Canadian CEOs said they are very confident about their company’s prospects for revenue growth over the next three years - 4% more than global CEOs.  

The perceived threats to company growth are the common suspects, namely skills shortages, trade difficulties and protectionism, and cyberattacks.Of Canada’s CEO respondents, 88% were somewhat or extremely concerned about the availability of key skills, while 84% were concerned about trade conflicts, protectionism, and cyber threats, and 79% were worried about policy uncertainty. Canadian CEOs were more concerned with threats facing their organization’s growth than the global average.

With increasing trade troubles, protectionist tendencies, and general diplomatic tensions emanating from the US, UK, and China, Canadian CEOs seem to be looking inward for growth. When asked which three foreign countries are the most important to Canadian firms’ growth prospects, the US’ share dropped from 88% in 2018 to 60% in 2019, the UK’s share fell from 30% to 16%, and China’s share plummeted from 53% to 12%. Only Mexico saw increased interest, increasing from 7% in 2018 to 12% in 2019.

"As Canadian CEOs increasingly look inward for growth opportunities against a tough global economic backdrop, the pressure to transform their businesses has never been greater," Nicolas Marcoux, PwC Canada's CEO, said. "The shift away from China and the US creates a golden opportunity for Canadian businesses and governments to collaborate in order to enhance our country's attractiveness for investment. Coming together to get upskilling right is a key step in a multi-pronged approach to help us secure a greater piece of the global economic pie — for the benefit of all Canadians."

Canada’s CEOs are concerned with the availability of important skills in their industry, with 88% saying so versus 51% in 2018. Additionally, 84% agreed that artificial intelligence (AI) will significantly change their business within the next five years, though only 40% say AI is present in their organization to some extent. Only 7% said it is present widely.

Unfortunately, Canadian CEOs have a somewhat unenlightened approach to bridging the talent gap, be it for these tantalizing emerging technology fields, or other tech or non-tech skills. Of those surveyed, 41% said establishing a strong pipeline direct from education is the most important method to close a potential skills gap in their firm, while only 16% picked “significant retraining or upskilling.” The views of Canadian CEOs are completely inverted to those of global CEOs, of whom 17% chose a direct education pipeline, while 46% identified retraining and upskilling.

It’s a more callous approach, treating people trained for a different world as so much detritus, and simply replacing them with youth pumped out of an educational system attempting to align more with future talent needs. That’s a problem, especially as nearly half of Canadian CEOs believe that AI technology will displace more jobs than it creates.  

“Digital proficiency has to rise across the organization – and CEOs need to create an environment to drive this change,” the PwC report states. “Digital workforce transformation requires new knowledge, different skills, and an entirely fresh mindset, so it’s time to empower everyone to transform the way they work.”