Two-thirds of senior level chartered accountants interviewed for the first quarter CICA/RBC Business Monitor expect Canada to experience economic growth by the end of the second quarter of 2010.

In the interim, respondents predicted declines in revenues and profit for their own businesses in the year ahead — averaging a 3.9% decrease in revenue and 4.3% decrease in profit, which is a significant shift from the same time last year when respondents predicted revenue growth for their own businesses of 2.4% and profit growth of 1.3%.

Overall, national economic optimism remains at historically low levels at 4%, a considerable decline compared to 24% in the first quarter of 2008. Optimism for the respondents’ own businesses is also low at 21%, down considerably from 48% a year ago.

Not surprisingly, when asked about share price, 92% of respondents who work for public companies indicated that they believed their share price is undervalued.

“It is good to hear that a majority of our CA respondents expect a return to positive growth next year,” says Kevin Dancey, president and CEO, Canadian Institute of Chartered Accountants. “While the optimistic outlook is welcome, tough challenges remain and Canada’s chartered accountants are valued professionals that an organization can trust to help guide key decisions.”

To mitigate the challenges of the respondents whose companies are negatively affected by the economic downturn, 67% indicated they had reduced labour costs, while 64% reduced travel expenditures, and 61% delayed capital expenditures. Additionally, 48%)have reduced advertising/marketing costs and 46% delayed expansion plans.

“There is a distinct need and opportunity for all of us — banks, professionals and government — to find ways to provide support and ensure Canadian business’ long term survival,” says Shauneen Bruder, executive vp, RBC Business and Commercial Banking. “With Canadian and U.S. policymakers becoming increasingly aggressive in implementing measures to reverse the economic downturn and boost growth, we believe Canada’s recovery will gain momentum in 2010.”

The CICA/RBC Business Monitor is issued quarterly, based on a survey conducted by The Canadian Institute of Chartered Accountants (CICA). The report draws upon business insights of CAs in leadership positions in privately and publicly held companies across Canada. For this Q1 2009 report, emailed surveys were completed by 539 CAs of 3,724 identified by the CICA as holding senior positions (CFOs, CEOs and COOs) in publicly or privately held companies in Canada. The response rate was 14%, with a margin of error associated with this type of study at +/- 4.2%, with a confidence level of 95%.

IE