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Press Release

Canadian CFOs Remain Positive on State of National Economy and Industry, Says New GE Capital Survey

November 08, 2012

  • View of world economy remains less optimistic
  • Most CFOs expect increasing or stable profits this year
  • Large majority to continue hiring over next 12 months
  • Top immediate concerns: European fiscal conditions and U.S. economy

MISSISSAUGA (ON) AND MONTREAL (QC) --- The sentiment of Canadian chief financial officers (CFOs) of middle-market companies on the state of their own industry and the strength of the national economy remained steady and positive in the third quarter, according to the latest GE Capital Mid-Market CFO Survey. CFOs' view of the world economy was unchanged and remains less optimistic than about the national economy.

More than one-third (38%) of CFOs think the national economy will grow over the next 12 months. Nearly half (48%) think it will stay the same, although that's down three percentage points since the last survey in this series, which was conducted in the first quarter of 2012.

The survey, which was conducted during the third quarter of 2012, included responses from 203 CFOs of companies with average revenues of $163.3 million operating across five distinct industries including: Energy; food, beverage and agribusiness; metals, mining and metals fabrication; retail; and transportation.

CFOs' top two immediate concerns are the potential impact of European fiscal conditions and the American economy, although worries about the latter declined by five percentage points since the first quarter. Concerns about unemployment, oil prices and credit market liquidity also increased. In a similar GE Capital survey conducted in the U.S. during the same time period, unemployment is the top concern, followed by the U.S. budget deficit and European fiscal conditions.

Over the next 12 months, Canadian CFOs expect labour costs to have the greatest impact on business performance, followed by costs for energy (including oil and gas) and materials, supplies and equipment. Concerns about the European economic slowdown increased the most, while concerns about the strength of the Canadian dollar decreased the most.

"Our survey shows that, despite a range of domestic and international concerns, Canadian CFOs still expect company growth over the next 12 months, which is very good news" said Katherine Lee, president and CEO of GE Capital's commercial lending and leasing business in Canada. "We stand ready to help them expand their businesses, whether that means growing into new geographies, taking advantage of merger and acquisition opportunities or acquiring new equipment."

2012 Growth and Profit Expectations

  • Despite a slight softening, nearly half of Canadian CFOs expect their businesses to grow moderately over the next one to three years. Moreover, most CFOs expect increasing or stable profits in 2012.
  • Thirty-eight percent of CFOs expect to be in a cyclical or limited growth phase over the same time period, an increase of five percentage points.
  • Nearly three-quarters (72%) expect profits to increase or remain the same this year compared to last year. Of those who say profits will rise, the expected increase holds steady at 9%.
  • Nearly two-thirds (61%) expect revenues to increase, down from 67%. Expectations for a revenue decrease jumped 12 points. Of the 61% who say revenues will rise, the expected increase grew five points to 13%.
  • Almost three-quarters (73%) said their new order pipeline is the same or better compared to this time last year; that represents a 17 point decrease among respondents who said their pipeline had increased.

Confidence Indicators: Hiring, Cost Structure and Capital Expenditures

  • Nearly three-quarters (74%) of CFOs said their companies have been hiring this year, up from 63% in Q1'12. Seventy-three percent plan to hire over the next 12 months, down three points. The retail, energy and transportation industries are the most bullish in their hiring plans.
  • Companies conducting layoffs declined over the past 12 months, down six points to 33%. Of companies that conducted layoffs, the size of the workforce reduction was up four points to 14%.
  • CFOs in four of the five industries surveyed expect their cost structures to increase in 2012. Of those who say cost structures will rise, the expected increase rose to 7% from 5%.
  • Most CFOs plan to keep capital expenditures about the same this year compared to 2011, but more than one-third (37%) plan to increase them. Transportation CFOs lead all industries in expectations for greater cap-ex (45%, up 5 points). Fewer U.S. CFOs expect cap-ex to be greater (28%), and a larger share (47%) think it will stay about the same.
  • Fifty-nine (59%) percent said their financing needs will remain the same through the next 12 months (down six points). Thirty-four (34%) percent said their financing needs will increase (up four points); those in the energy industry are most likely to expect increased financing needs. In the U.S., 72% think their needs will stay the same, and 20% expect them to increase.

Other Top Findings

  • End-market demand --- Canadian CFOs are increasingly concerned about end-market demand (46%, up from 38%) and capital / liquidity constraints (29%, up from 19%). In the U.S., end-market demand is also the top business concern (46%). The second-greatest concern is competition from larger companies (37%). Capital / liquidity constraints were mentioned by 17% of U.S. CFOs.
  • Credit availability --- The majority of CFOs said their current lender has maintained credit availability (61%) and will continue to do so if additional financing is necessary (58%).
  • Pricing outlook --- Over half (51%) plan to raise prices in 2012, although more plan to decrease prices than in Q1'12; that compares to 44% in the U.S., where CFOs are more likely to keep pricing stable (45%).
  • Internal challenges --- Implementing service process improvements (55%) and talent/leadership development (51%) were cited as CFOs' biggest internal challenges in 2012. In the U.S., the number one challenge is employee benefit cost reductions (54%).

For an executive summary, including industry highlights, visit for English or for French.

Editors' Note
Among the CFO surveys published in the Canada, the GE Capital Middle-Market CFO Survey is one of the few that examines businesses across distinct sectors, providing a more comprehensive picture of the way financial executives view the world today and their outlook for the months ahead. The CFOs who were surveyed were selected from among GE Capital's current and prospective customers. The list comprises middle-market companies with revenue between CAD$50 million and $1 billion (with the exception of transportation industry respondents, where revenues start at $15 million).

About GE Capital
With more than 20 offices throughout Canada, GE Capital ( offers a wide variety of financial products and services to address commercial financing and fleet management needs in all phases of a business' lifecycle. From equipment finance to working capital and growth financing to large asset-based and restructuring loans, we apply our wealth of industry expertise and develop custom solutions for your company. Some of the industry sectors we specialize in include transportation, construction, healthcare, agriculture, forestry, manufacturing, oil and gas, wholesale and retail, and restaurant and hotel franchise.

GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visit or follow company news via Twitter (@GECapital).

Lisa Tibbitts
GE Capital
[email protected]
+1 203 956 4582
+1 203-803-6142

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