Business leaders typically more confident on their firm, domestic economy
Chief executive officers of Canadian companies have lost some of the optimism they had in their own business and the Canadian economy, but not by global standards.
Canada’s CEOs are more confident in the outlook for their own firms and the domestic economy than peers in 11 key markets including the US, UK, Australia, Japan, France, Germany, and China but less so on the global economic outlook.
However, the research from the KPMG CEO Outlook reveals a decline in optimism among Canadian and global CEOs compared to 2023. On their own business, 76% of both Canadian and global CEOs said they were confident in three-year growth prospects, down from 80% and 77% respectively a year ago.
On the outlook over the same period for their own domestic economy, Canadian CEOs were bullish (83% confident) compared to their peers’ outlook for their respective economies (78%) but while the global percentages are the same year-over-year, the Canadian figure is down from 89% in 2023.
For the global economy, 69% of Canadian CEOs are confident of growth, while 72% of their peers agree, but the Canadian share is static year-over-year while the global share is down one percentage point.
Across all three key areas (own business, domestic economy, global economy) owners and C-suite decision makers at Canadian SMBs are more optimistic than a year ago (92%, 88%, and 84%) by around 3-4 points in each case.
ESG pressure
Canadian leaders are feeling the pressure to deliver though, with ESG commitments and productivity among the challenges.
Implementing ESG strategy was named as the top operational priority for Canadian CEOs and while only half say they are prepared for scrutiny, including from investors, they are more prepared than their global peers (36%). ESG is less important for SMB owners and C-suite (4th place) with implementing generative AI taking the top spot.
"It's not surprising that CEOs are confident after piloting through one of the most-turbulent periods in recent business history, but they acknowledge they're now feeling the growing pressure of leading their organizations," says Benjie Thomas, CEO and senior partner, KPMG in Canada. "Now they are aggressively looking for ways to improve their company's productivity, optimize revenue, take advantage of new technologies like generative AI, and become cyber-proof, trade-proof and inflation-proof."
Asked about the issues that they felt could derail their growth plans, Canadian CEOs ranked operational risks, cybersecurity and environmental / climate change as their top three, while SMB owners cited cybersecurity, emerging and disruptive technologies, and energy security and affordability.
Economic uncertainty remains a key concern for Canadian and global business leaders.
"Our survey findings show that business leaders are focusing their resources on meeting their growth forecasts and improving productivity," says Tim Prince, Canadian Managing Partner, Clients and Markets, KPMG in Canada. "Canadian business leaders are well aware that they will need to continuously improve their operations, decarbonize their operations, and upskill their workforce to compete in a world that's getting tougher by the day, whether it's changing demographics, growing trade protectionism, or the impacts of climate change."
