Survey Results Say Canadian Companies Are Optimistic Despite Slump

November 4, 2011

Despite another slowdown in the economy, private Canadian companies are still aiming for growth and expansion. In fact, their confidence level is the highest it's been since 2005. This year's Business Insights survey showed that 82 percent of respondents are striving for growth compared to 66 percent last year.

"Canadian private companies learned a lot through the recession about how to survive, and they've repositioned their businesses to face the challenges. Having adapted to the new business reality, they are ready for whatever the markets throw at them, which accounts for the optimism," said Tahir Ayub, Canadian leader of PwC's Private Company Services practice.

While determined to grow, many private companies surveyed have been more reserved with their expectations for growth in response to the uncertainty in world markets. For example, only 10 percent of respondents were looking to grow aggressively by 15 percent or more; last year that number was 24 percent. While remaining optimistic, they are also being realistic. When surveyed in June/July 2011, 83 percent said they expect their business to do a little or a lot better over the next 12 months. This number fell to 74 percent in September 2011.

Over the next 12 months, businesses predict the top three issues to be competition (34 percent), profitability (29 percent), and labor shortages (26 percent).

"It is just a more highly charged competitive market today. Private companies realized how important it was to keep improving during the recession, and they're continuing to look at their cost base and efficiencies," Ayub said.

To improve competitive performance, respondents cited the top 10 priorities:

1. Improving processes (47 percent)
2. Reducing costs of operations (46 percent)
3. Improving staff skills (39 percent)
4. Targeting customers better (37 percent)
5. Retaining staff (33 percent)
6. Planning expansion (30 percent)
7. Investing in IT (22 percent)
8. Defining and evaluating strategy (21 percent)
9. Collaborating/making strategic alliances (21 percent)
10. Increasing R&D/innovation (19 percent)

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