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

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

December 21, 2007 19:24 ET

T.E.C. (The Executive Committee) Ltd.: Canadian CEO Economic Confidence Continues to Wane, Dropping to an All Time Low

yet there is an optimism that 2008 will bring increased sales and profits

CALGARY, ALBERTA--(Marketwire - Dec. 21, 2007) - T.E.C. (The Executive Committee) Ltd.: Canadian CEOs and business leaders continue to show that confidence in the Canadian economy is wavering. The fourth quarter 2007 CEO Index score, 95.6, is the lowest recorded since scoring began in the second quarter of 2003 by TEC Canada, Canada's leading chief executive development organization. The current score represents a decline of 11.7 points down from 107.3 reported in the last survey issued in September 2007.

The fourth quarter 2007 CEO Index was conducted in early December and participants consisted of one hundred and ninety of TEC Canada's CEOs and business leaders. When asked compared to a year ago whether the overall economic conditions in the Canadian economy have improved, remained the same, or worsened, 21% said economic conditions had improved, 34% said they had stayed the same, and 45% indicated they had worsened. When asked about their predictions for the next 12 months, 11% said economic conditions would be better, 50% said they would remain the same, and 39% expect economic conditions to worsen. Overall, the outlook for economic improvement in 2008 is not expected to veer too far from the current conditions.

In light of the overall expectation that the Canadian economy will remain fairly constant in 2008, 68% of the survey participants anticipate an increase in sales revenues over the next year. Only 22% indicated they anticipate sales to remain the same, with 10% anticipating a decrease. Profitability expectations show 53% of the CEOs and business leaders surveyed indicated improved profitability. 31% expect profitability to remain the same while 16% expect it to worsen. When asked about the likelihood of company fixed investment expenditures over the next 12 months, 39% expect an increase, 40% expect fixed investments to remain the same, while 21% expect a decrease in fixed investment expenditures. Despite a backdrop of faltering economic confidence, Canadian CEOs and business leaders look to the year ahead with anticipation for favourable sales and profitability.

In line with a view to increased sales and profitability, increases in staffing are also favoured in 2008. 48% of those surveyed indicated intentions to increase staff over the next 12 months, while 40% envision no change and only 12% anticipate staff reduction. Of those that intend to increase staff in 2008, the highest percentage (29%) said the increase would occur steadily over the next 12 months, 15% plan the increase in the first quarter of 2008 and 12% are intent on increasing staff in the second quarter of 2008.

For the first three quarters of 2007 staffing has consistently been the number one significant business issue. In the first quarter of 2007 staffing was reported by 46% of those surveyed. In the second quarter of 2007 staffing was reported by 43% and, in the third quarter it was reported by 44%. Interestingly, in the fourth quarter of 2007, staffing continues to take the lead, but it is down significantly, dropping to 34%. Staffing is followed by financial issues at 21%, and economic uncertainty where there has been a jump from 9% in the third quarter to 16% in the fourth. Fourth quarter results also indicated 17% of the respondents selected "other " as a response to significant business issues. The leading description under "other" identified 'appreciation of the Canadian dollar' as the most frequently expressed response making up 14 of the 32 responses. This was followed by 'exchange rates' as the second most repeated response which represented 6 of the 32 responses given. It becomes evident that a shift has occurred over the past year indicating that while staffing has maintained a top position as the number one business issue, the value of the Canadian dollar has significantly impacted the fourth quarter as a recent development in the area of significant business issues.

Tied in with the emergence of the value of the Canadian dollar as an issue were responses to how the Canadian dollar has impacted the businesses of the survey respondents. Of the respondents 19% identified themselves as importers, 33% exporters, the balance indicated they were neither. 18% indicated impact had been positive, 54% indicated a negative impact, and 28% said the strength of the Canadian dollar has not effected their particular business. When asked what the long term effect of a strengthened Canadian dollar on the economy is believed to be, the responses reflected 48% believe this will have a mild negative effect with 26% believing a strong negative effect will be felt.

The fourth quarter 2007 survey also posed questions that would provide a snapshot profile of a typical Canadian CEO. The survey found 70% of the CEOs surveyed are first born children and 45% identified the person having the most influence on them is their father. In addition, the average CEO and small business owner works 51 to 60 hours a week (58% of responses), feels that the demands cause more stress today than one year ago (61%), and the chief reasons for this include too much work to do (18%), staffing issues (17%), and financial issues (16%). The typical CEO then is a first born that has been significantly influenced by their father, works 51 to 60 hours a week and feels the pressures of workload, staff, and finance are factors greater in their lives today than they were one year ago.

As the fourth quarter of 2007 draws to a close the confidence of Canadian CEOs and business leaders shows a deep decline yet the outlook for 2008 bears a steadfast optimism that sales and profits will increase in 2008.

One hundred and ninety CEOs of small to mid-sized 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

Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006

Index Score: 121.9 122.4 117.6 118.5 108.8

Current Economic Conditions 136 134 142 134 94
Expected Economic Conditions 109 119 110 106 80
Planned Fixed Investment 149 146 144 147 149
Planned Revenue Growth 176 181 167 177 173
Expected Profit Growth 159 155 143 147 148
Expected Change in Employment 159 158 151 154 150


Q1 2007 Q2 2007 Q3 2007 Q4 2007

Index Score: 109.6 112.2 107.3 95.6

Current Economic Conditions 98 114 102 76
Expected Economic Conditions 94 100 83 72
Planned Fixed Investment 176 146 141 136
Planned Revenue Growth 156 140 139 118
Expected Profit Growth 135 171 168 158
Expected Change in Employment 141 149 148 137


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 Q4 2007 TEC Confidence Index is a compilation of responses from 190 Canadian CEOs of small to mid-sized companies, surveyed Thursday, December 6, 2007 - Thursday, December 13, 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 70 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.



TEC Confidence Index
Q4 2007

190 Respondents - 36% Response Rate
Margin of Error +/- 7.1%
Thursday, December 6, 2007 - Thursday, December 13, 2007


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

Response Total Response Percent
Improved 40 21%
Remained the same 64 34%
Worsened 86 45%
Total Responses 190


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 21 11%
About the same 95 50%
Worse 74 39%
Total Responses 190


3. 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 74 39%
Remain about the same 76 40%
Decrease 40 21%
Total Responses 190


4. 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 129 68%
Remain about the same 42 22%
Decrease 19 10%
Total Responses 190


5. 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 101 53%
Remain about the same 59 31%
Worsen 30 16%
Total Responses 190


6. 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 89 47%
Remain about the same 80 42%
Decrease 21 11%
Total Responses 190


7. 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 91 48%
Remain about the same 76 40%
Decrease 23 12%
Total Responses 190


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

Response Total Response Percent
Q4 2007 4 2%
Q1 2008 28 15%
Q2 2008 22 12%
Steadily throughout the next 12 months 56 29%
I do not plan to increase my total number
of employees over the next 12 months 80 42%
Total Responses 190


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

Response Total Response Percent
Rising energy costs 3 2%
Rising healthcare costs 0 0%
Staffing (finding, hiring, retaining, and
training) 64 34%
Growth (growing too slowly) 11 6%
Growth (growing too quickly) 8 4%
Financial issues (finance, cash flow,
profitability) 39 21%
Economic uncertainty (concern for local
and national economy, budget deficit,
housing market) 30 16%
Political uncertainty 2 0%
Other 32 17%
Skipped 1 0%
Total Responses 190


10. Has the strengthened Canadian dollar had an effect on your business?

Response Total Response Percent
Yes, positively 34 18%
Yes, negatively 102 54%
No 54 28%
Total Responses 190


11. You are:

Response Total Response Percent
An importer 37 19%
An exporter 62 33%
Neither 91 48%
Total Responses 190


12. Do you expect your company's sales in Q4 to be:

Response Total Response Percent
Better than last year 94 49%
Same as last year 48 25%
Not as good as last year 43 23%
Not applicable 5 3%
Total Responses 190


13. Have you lowered or do you plan to lower prices for goods and/or
services to combat the trend of Canadians choosing to shop in the United
States?

Response Total Response Percent
We have lowered prices of our goods
and/or services 30 16%
We plan to lower prices of our goods
and/or services 4 2%
We have no plans to lower prices for our
goods and/or services 37 19%
Not applicable to my business 118 62%
Skipped 1 1%
Total Responses 190


14. What long term effect do you think the current strength of the Canadian
dollar will have on the nation's economy?

Response Total Response Percent
Strong positive effect 11 6%
Mild positive effect 35 18%
No effect 4 2%
Mild negative effect 91 48%
Strong negative effect 49 26%
Total Responses 190


15. On average, how many hours do you work per week?

Response Total Response Percent
Under 50 37 19%
51-60 110 58%
61-70 38 20%
Over 70 5 3%
Total Responses 190


16. Do you feel the demands of your chief executive position cause more
stress today than they did one year ago?

Response Total Response Percent
Yes 116 61%
No 73 38%
Skipped 1 1%
Total Responses 190


17. If you answered yes to the question above, please specify:

Response Total Response Percent
Too much work to do 35 18%
Staffing issues 32 17%
Financial issues 31 16%
Personal issues 3 2%
Other, (please specify) 12 6%
Skipped 77 41%
Total Responses 190


18. Are you a "first born" CEO?

Response Total Response Percent
Yes 133 70%
No 52 27%
Skipped 5 3%
Total Responses 190


19. Who has been the most influential person in your life?

Response Total Response Percent
Mother 33 17%
Father 86 45%
Spouse 35 18%
Teacher 10 5%
Public Figure (please specify): 7 4%
Skipped 19 10%
Total Responses 190


Two related graphs are available via the link: http://www.ccnmatthews.com/docs/1221TEC_graphs.pdf

Contact Information

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