Confidence among Canadian business leaders increases as global outlook improves
YPO , the premier chief executive leadership organisation in the world, announced today that economic confidence among business leaders in Canada increased during the final quarter of 2016. The YPO Global Pulse Confidence Index for Canada rebounded in the fourth quarter, edging up 1.6 points to 58.4, following a 3.1-point drop in confidence in the third quarter.
The marginal improvement in economic outlook follows stable economic conditions within Canada and gradual increases in commodity prices. Over the past six months, 39% of Canadian chief executives believed that business and economic conditions had improved, and 45% said conditions had remained steady. Only 16% reported deterioration in the economic climate.
Similarly, when looking ahead to the first half of 2017, 37% of business leaders predicted a more favourable economic landscape, while 14% expected conditions to get worse. About half (49%) expected little or no change.
"It's encouraging that the slip in confidence that we saw in the third quarter has been reversed and seems to have been a temporary dip," said Prashant Pathak, CEO of Ekagatra, Inc. and a member of YPO in the Toronto area. "There are definitely signs that the Canadian economy is stable and set for growth in 2017, but of course chief executives in Canada will be looking south of the border to see how proposed trade policies could impact Canadian exports and global economic conditions more broadly. It will very much be a case of waiting to see what unfolds over the coming months, remaining cautious while also looking for new opportunities."
The improved outlook in Canada was in line with a more optimistic outlook around the world. Globally, the YPO Global Pulse Index for the fourth quarter of 2016 climbed by 3.0 points to 62.2, its highest level in two years. Confidence in the European Union remained steady, edging up to 60.9, while confidence in Asia climbed 1.2 points to 61.2. Elsewhere, the business outlook in Latin America increased by 2.4 points to 58.3, while confidence in the Middle East and North Africa jumped 5.6 points to 59.5. Africa reported a 0.8-point decline, dipping from 55.5 to 54.7, making it the second least confident region in the world after non-EU Europe, which increased 2.5 points to 54.3.
Key findings in Canada
Sales and hiring outlooks improve
Looking ahead to 2017, Canadian business leaders reported renewed confidence, particularly when it came to the prospects for their own organisations, which is reflected in in the three key indicators of the YPO Global Pulse Confidence Index: sales, hiring and fixed investment.
For the region, the YPO Sales Index climbed 1.9 points from 61.8 to 63.7, as more than half (57%) of the respondents expected to increase revenues in the next 12 months, compared with only 6% who predicted a decline in turnover. The YPO Employment Index for Canada gained 2.3 points from 54.7 to 57.0, as more than a third of business leaders (36%) expected to increase their employee headcount in the coming year, while only 6% predicted cuts to staff numbers. Finally, the YPO Fixed Investment Index for Canada saw a slight decline, dropping 1.0 point to 56.0. However, more than a third (37%) of chief executives still expected to increase investment levels in 2017 versus 14% who predicted lower investment spend.
YPO Global Pulse Confidence Index The quarterly electronic survey, conducted in the first two weeks of January 2017, gathered answers from 1,514 YPO chief executive officers across the globe, including 71 in Canada. Visit http://www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
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