Canadian CEOs are world’s most confident of economic growth

KPMG’s international survey finds a bullish outlook reflecting the investment firms have made in digital transformation and capabilities

Canadian CEOs are world’s most confident of economic growth
Steve Randall

The potential for economic growth in Canada has surged over the last year according to some of the country’s top CEOs.

An international survey from KPMG reveals that 89% of the chief executives leading Canada’s biggest and most influential firms are bullish on the local economy’s growth prospects for the next three years.

They are also confident in the growth prospects of their own firms (86%) although their view of how the global economy might fare is weaker (55%) than it was in January 2020 (72%).

Overall, their outlook is weaker than it was before the pandemic, but Canadian CEOs are generally more optimistic than peers across the 11 countries included in the poll.

"Although we saw some recent softness in the economic data, Canadian CEOs are confident that the investments they've made to ramp up their digital capabilities and prowess positions them for strong future growth," says Elio Luongo, Chief Executive Officer and Senior Partner, KPMG in Canada. "Making these strategic investments during unprecedented challenging conditions will allow their organizations to take advantage of pent-up consumer demand as Canada navigates through and emerges from the pandemic."

Canadian CEOs are more likely to see technological disruption as an opportunity rather than a threat but note that they need to be faster to adapt and adopt.

Supply chain risk, ranked as a top three threat to three-year growth prospects among global CEOs, is only ranked 9th by Canadian business leaders, despite them reporting an impact on their supply chains in the last 18 months. 

Earnings potential?

How might this optimism among Canadian CEOs translate to earnings?

Nearly 40% of Canadian CEOs forecast 2.5-4.99% per annum earnings growth for the next three years, while nearly half of global leaders are expecting less than 2.5% per annum earnings growth.

"The key to meeting their growth forecasts will be how well they adopt and continue to execute their digital transformation strategies to not only grow but protect existing market share," says Stephanie Terrill, Partner and Business Unit Leader, Management Consulting, KPMG in Canada. "Business performance throughout the pandemic clearly demonstrated the value of digital and that trend is only likely to accelerate further. Canadian CEOs now rank disruptive technologies as the top risk to future growth, displacing climate change."