Executives Pin Hopes on Government Solutions

(David Herle/Alex Swann — Globe & Mail)

You’ve read all the bad news. Now where’s the light at the end of the tunnel?

It was no surprise to us that this quarter’s C-Suite survey paints the bleakest picture in three years of surveys about our economy, and the highest level of pessimism yet from executives of Canada’s top 1,000 companies.

Over the past six quarters executives expressed deep concerns in our survey about the U.S. economy and more recently started to cast doubt on the Canadian economy. But this is the first quarter where a significant number predicted negative growth for their firms.

Yet it’s in spite of this worsening situation that a majority are predicting a turnaround in the near to medium term. Even though more executives say it’s more difficult to get access to credit this quarter compared with last, more executives this quarter are willing to say these concerns are going to improve in the short term. This is not to say there’s consensus on these issues: Forty-four per cent of executives say it will take longer than a year for the economy to turn around and grow. It is telling, though, that despite what some call the worst crisis of its kind since the 1930s, half of executives predict a turnaround soon and expect that consumer spending will improve over the next 12 months.Part of this optimism may draw on what executives are seeing from governments around the world. While companies are cutting back, executives are supportive of policies they believe will help Canada stave off recession, including a stimulative deficit.

Nearly half of Canadian executives - and well more than that in Ontario - believe Finance Minister Jim Flaherty’s economic statement was inadequate to deal with the economic crisis and should have included immediate fiscal stimulus to spur the economy. That is not to say they expressed a desire for a Liberal-NDP coalition to provide a better economic plan - quite the opposite. But business leaders are going to be looking to the Conservatives’ January budget for more. Read more here.