T.E.C. (The Executive Committee) Ltd.

T.E.C. (The Executive Committee) Ltd.

October 03, 2007 13:23 ET

CORRECTION FROM SOURCE: T.E.C. (The Executive Committee) Ltd.: Canadian Economy Holds While CEO Confidence Takes a Plunge

Amidst a steady economy, survey results show CEO confidence in the Canadian economy is dropping, staffing challenges persist, and there is an emerging awareness of a need to change management styles for a new generation of worker

CALGARY, ALBERTA--(Marketwire - Oct. 3, 2007) - T.E.C. (The Executive Committee) Ltd.:

In the release issued on September 28, 2007, the 4th paragraph contained some errors - the corrected and complete release is as follows:

Canadian CEOs and business leaders have indicated that the Canadian economy is holding steady but confidence is moving downward. At 107.3, the third quarter Canadian CEO Confidence Index score is the lowest recorded since the inauguration of the report in the second quarter of 2003 by TEC Canada, Canada's pre-eminent chief executive development organization. After enjoying a rise in confidence in the second quarter of 2007, the latest score represents a drop by 4.9 points. The present score, while in line with the fourth quarter score of 2006 (108.8) and the first quarter of 2007 (109.6), represents the lowest confidence score recorded to date.

Over 150 of TEC Canada's CEOs and business leaders participated in the survey and when asked about overall economic conditions in Canada during the past quarter, 49% said conditions had remained the same as the last quarter while 26% said they had improved and 25% indicated they had worsened. When asked whether they expected things to improve 57% stated the economy will remain the same, 13% are looking for it to improve, and 30% are predicting a worsening overall. It appears there are mixed economic predictions of strengthening and of weakening as it remains to be seen which direction the Canadian economy will take over the months ahead.

In respect to sales revenues, 76% of the survey respondents believe revenues will increase over the next 12 months with only 7% indicating a decrease, and 17% seeing no change. Just over half of those surveyed (52%) expect fixed investment expenditure to increase over the same period with 35% envisioning no change, and 13% predicting a decrease. Moving to company profitability, 61% said they expect improvement over the next 12 months, 27% believe profits will stay the same, and 12% foresee a worsening. All in all, the picture paints fairly optimistic predictions for sales, fixed investment expenditures, and profitability over the next year.

The impact of the higher rate of exchange of the Canadian versus the US Dollar revealed a range of responses. Only 4% said this scenario had a strong positive impact on their businesses while 21% said impact was mild but positive, a further 25% said they felt no impact, while 29% reported a mild but negative impact and finally 20% reported a strong negative impact. With the Canadian dollar having recently hit par with the US dollar and the survey having been taken just before this event, 60% of respondents surveyed at the time said they expected the Canadian dollar will be maintained over the next 12 months and 18% said it will become weaker, 21% said stronger.

Staffing continues as a persisting challenge facing Canadian CEOs and business leaders. When asked about their hiring trends 55% said they will be looking to increase the number of employees they hire over the next 12 months and 32% said they would maintain the number they have right now and 14% said they would decrease their staff. In addition to this, 32% said they would accomplish this hiring steadily over the next year with 36% stating they do not plan to hire over the next year, the remaining respondents will do their hiring between now and the first quarter 2008. These indicators point toward a pattern that is becoming all too familiar where there is an overabundance of work and not enough skilled people available to fit the bill.

To add another dimension to the hiring picture, a full 46% of survey respondents indicated that a lack of qualified candidates has been one of the most significant factors impacting hiring over the past five months. Adding pressure to this, indicated by 21% of respondents, is that the economy in western Canada is continuing to play into the challenges with labour. A full 44% responded that staffing is the most significant business issue currently being faced followed by 23% indicating financial issues (financing, cash flow, profitability) and 15% identifying slow growth and also economic uncertainty as the culprits.

The survey questions probing consumer requests for environmentally friendly products and services and the profits related to these, have returned results indicating that 44% of the respondents answered that consumers have not been requesting products and services and a further 30% said that this was not applicable to their particular business. However, 25% answered yes that consumers have been requesting these products and services. In terms of the profits realized by companies who had changed their products and services towards increasing environmental friendliness, when taken together an overall 93% of the respondents indicated that they had not noticed a change in profit (24%), that there has been no change (22%), or that this was not applicable to their businesses (47%) with only 6% saying they had realized an increase in sales.

There is an emerging awareness by Canadian CEOs and business leaders that management styles must change to be in line with the new generation of workers. Based on the responses to a survey question focusing on the impact of the new workforce, Generation Y, (or those aged 16 to 29 years of age), on management styles, 73% of those surveyed responded "yes" to the question on whether CEOs and business leaders are seeing a need to change management styles to adapt to the needs of this generation of worker. There were 22% who reported "no" and only a mere 8% indicated that this was not applicable to their specific businesses. It appears most businesses have recognized that they must move towards addressing management styles tailored for a new generation of workers.

With a view towards maintaining the economy over the next quarter and confidence at the lowest score to date it would appear that Canadian CEOs and business leaders will be watching carefully as the next quarter unfolds.

One hundred and fifty-five CEOs of small to mid-size businesses took part in the survey and shared their views on current economic trends, issues affecting business and Canada as a whole.



TEC Confidence Index Component Questions

Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006

Index Score: 112.1 121.9 122.4 117.6 118.5

Current Economic
Conditions 125 136 134 142 134
Expected Economic
Conditions 102 109 119 110 106
Planned Fixed Investment 130 149 146 144 147
Planned Revenue Growth 166 176 181 167 177
Expected Profit Growth 146 159 155 143 147
Expected Change in
Employment 148 159 158 151 154


Q4 2006 Q1 2007 Q2 2007 Q3 2007

Index Score: 108.8 109.6 112.2 107.3

Current Economic Conditions 94 98 114 102
Expected Economic Conditions 80 94 100 83
Planned Fixed Investment 149 176 146 141
Planned Revenue Growth 173 156 140 139
Expected Profit Growth 148 135 171 168
Expected Change in
Employment 150 141 149 148


NOTE: All component questions are scored as the percent giving favorable
replies minus the percent unfavorable plus 100. The TEC Confidence
Index is the sum of the components calculated as a percentage of the
level recorded in the Q2 2003 survey.


ABOUT THE CANADIAN TEC CONFIDENCE INDEX

Canadian businesses with annual sales between $1 million and $900 million represent the most vital component of the nation's economy. This small to mid-size business sector creates 75 percent of all new jobs and generates 50 percent of revenue. The opinions of these business leaders provide a clear snapshot of current economic, market and industry trends and demonstrate their plans for growth over the next 12 months. These insights provide a leading indicator for employment, capital expenditure, sales and revenue trends.

The Q3 2007 TEC Confidence Index is a compilation of responses from 155 Canadian CEOs of small to mid-sized companies, surveyed Monday, August 27, 2007 - Tuesday, September 4, 2007. The TEC Confidence Index is the only comprehensive report of their opinions and projections. TEC Canada conducts the TEC Confidence Index quarterly.

ABOUT TEC CANADA

T.E.C. (The Executive Committee) Ltd. is a part of an international organization for chief executives (CEOs), managing directors, business owners and bottom line decision makers offering confidential business advisory sessions and professional support. Established in 1985, TEC Canada currently has over 800 members across the country, coast to coast.

TEC members constitute 60 plus think-tank/peer groups. Each group is led by a specially trained TEC Chair (generally a former CEO or President) who is committed to helping members enhance their leadership skills, find new intellectual capital, grow their business and achieve better work-life balance. Every group, which is composed of non-competing peers, meets in a monthly one day session. Additionally, TEC Chairs hold individual one-to-one sessions with their members designed to address their individual needs. For more information, visit www.tec-canada.com or call (800) 661-9209.

ABOUT VISTAGE INTERNATIONAL (FORMERLY KNOWN AS TEC INTERNATIONAL)

Vistage International Inc., formerly known as TEC International, helps companies solve business problems, achieve better results and outperform the competition. Since 1957, only Vistage members have had access to a comprehensive suite of services that includes peer-group sessions, one-to-one executive coaching, best practices from recognized experts and the collective wisdom of more than 14,000 business leaders. Vistage member companies grow, on average, at a rate 2.5 times faster than they did prior to joining (source: D & B 1998-2003). For more information, visit www.vistage.com.



155 Respondents - 29% Response Rate
Margin of Error +/- 7.9%
Monday, August 27, 2007 - Tuesday, September 4, 2007

1. Compared with a year ago, have overall economic conditions in Canada
improved, remained the same, or worsened?

Response Total Response Percent
Improved 41 26%
Remained the same 76 49%
Worsened 38 25%
Total Responses 155

2. During the next 12 months, do you expect the overall economic conditions
in Canada will be better, about the same, or worse than now?

Response Total Response Percent
Better 20 13%
About the same 89 57%
Worse 46 30%
Total Responses 155

3. Do you expect your firm's total number of employees will increase, remain
about the same, or decrease during the next 12 months?

Response Total Response Percent
Increase 85 55%
Remain about the same 49 32%
Decrease 21 14%
Total Responses 155

4. Are your firm's total fixed investment expenditures likely to increase,
remain about the same, or decrease during the next 12 months?

Response Total Response Percent
Increase 80 52%
Remain about the same 56 35%
Decrease 19 13%
Total Responses 155

5. Do you anticipate that your firm's sales revenues will increase, remain
about the same, or decrease for the next 12 months?

Response Total Response Percent
Increase 117 76%
Remain about the same 27 17%
Decrease 11 7%
Total Responses 155

6. Do you expect your firm's profitability to improve, remain about the
same, or worsen during the next 12 months?

Response Total Response Percent
Improve 94 61%
Remain about the same 42 27%
Worsen 19 12%
Total Responses 155

7. What impact has the higher rate of exchange of the Canadian dollar versus
the U.S. dollar had on your company?

Response Total Response Percent
Strong positive impact 6 4%
Mild positive impact 34 21%
No impact 38 25%
Mild negative impact 46 29%
Strong negative impact 31 20%
Total Responses 155

8. Do you expect the value of the Canadian dollar, compared with the U.S.
dollar, to be stronger, remain about the same, or be weaker during the
next 12 months?
Response Total Response Percent
Stronger 33 21%
About the same 93 60%
Weaker 29 18%
Total Responses 155

9. Do you expect prices for your product(s) or services(s) to increase,
remain about the same, or decrease during the next 12 months?

Response Total Response Percent
Increase 76 50%
Remain about the same 67 42%
Decrease 12 8%
Total Responses 155

10. When do you plan to increase your firm's total number of employees over
the next 12 months?

Response Total Response Percent
Q3 2007 10 7%
Q4 2007 15 9%
Q1 2008 26 16%
Steadily throughout the next 12
months 49 32%
I do not plan to increase my total
number of employees over the next
12 months 55 36%
Total Responses 155

11. Which of the following factors has had the most significant impact on
hiring in the last five months?

Response Total Response Percent
Oil/energy prices 8 6%
Healthcare costs 0 0%
Lack of qualified candidates 73 46%
Rise of the Canadian dollar 6 4%
Uncertainty of the growth rate of
the overall economy 5 3%
Off shoring (outsourcing outside
of Canada) 3 2%
Booming economy in western Canada 31 21%
None of the above has impacted
hiring in the last five months 23 15%
Other 6 4%
Total Responses 155

12. What is the most significant business issue that you are currently
facing?

Response Total Response Percent
Energy costs 2 1%
Healthcare costs 1 1%
Staffing (finding, hiring, retaining
and training) 67 44%
Growth (growing too slowly) 15 10%
Growth (growing too quickly) 6 4%
Financial issues (financing, cash
flow, profitability) 36 23%
Economic uncertainty (concern for
local and national economy, budget
deficit, housing market) 15 9%
Political uncertainty 1 1%
Other 12 8%
Total Responses 155

13. Are consumers requesting more environmentally friendly products or
services than last quarter?

Response Total Response Percent
Yes 39 25%
No 67 44%
Not applicable to my business 48 30%
Skipped 1 1%
Total Responses 154

14. If you have made your product(s) or service(s) more environmentally
friendly, have you noticed a difference in profit?

Response Total Response Percent
Yes, an increase in sales 9 6%
Yes, a decrease in operational costs 1 0%
I have not noticed a change 37 24%
I have not changed my product(s)
and/or service(s) 32 22%
Not applicable to my business 74 47%
Skipped 2 1%
Total Responses 153

15. Are you seeing a need to change your management style to adapt to the
needs of Generation Y (ages 16-29)?

Response Total Response Percent
Yes 112 73%
No 34 22%
Not applicable in my business 8 5%
Skipped 1 1%
Total Responses 154

16. Are you using any forms of online emerging new media (Myspace, YouTube,
Second Life, Facebook, or blogs) for business exposure?

Response Total Response Percent
Yes 13 8%
No 112 72%
No, but I plan to 29 19%
Skipped 1 1%
Total Responses 154

17. Which forms of online emerging new media are you currently using or
planning to use in the future?

Response Total Response Percent
GlobeandMail.com 19 12%
BNN.ca (Business News Network/Rob TV) 6 4%
Canadian Business.com (Profit -
Canadian Business) 2 1%
ScoreGolf.com 1 1%
None 104 67%
Other 19 12%
Skipped 4 3%
Total Responses 151


Two related graphs are available via the link: http://cnrp.ccnmatthews.com/cnrp_files/20070928-928TEC1.pdf

Contact Information

  • T.E.C. (The Executive Committee) Ltd.
    Toll Free: 1-800-661-9209
    Website: www.tec-canada.com