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

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

March 07, 2008 19:49 ET

TEC Canada Releases First Quarter 2008 CEO Index Results

CEO confidence at record low

CALGARY, ALBERTA--(Marketwire - March 7, 2008) - Canadian CEOs and business leaders project a worsening in economic conditions as we move through 2008. The first quarter CEO Confidence Index shows a downward slide from the previous quarter and a deep drop, over 17% change, in CEO confidence when compared to one year ago.

With an index score of 90.5 this quarter and a fourth quarter 2007 score of 95.6 the difference represents a 5.1 point drop. When compared with one year ago, when the index was at 109.6, the first quarter 2008 score represents a 19.1 point drop from that time. This downward movement continues a trend of decline in Canadian CEOs' confidence in the economy. The current score is the lowest since the inauguration of the survey in the second quarter of 2003. Yet amid declining confidence in the economy, Canadian CEOs anticipate sales revenues and profits to increase over the upcoming year.

In comparing the overall economic conditions in Canada over the past year and the overall economic conditions projected for the next 12 months, 36% say that overall economic conditions have remained the same and a full 55% say they have worsened. Looking ahead over the next 12 months, 42% indicate that overall economic conditions will remain the same. 51% say economic conditions will get worse. Only 9% indicate economic conditions have improved compared to a year ago. 6% show optimism that conditions will improve over the next year.

When it comes to making money over the next 12 months, CEOs show confidence that profitability and sales revenues will either stay the same or increase. A full 51% indicate that prices for their products/services will remain the same and 38% expect them to increase. 82% expect profitability to improve or remain the same and 90% expect the same from sales revenues over the same period of time. With only 10% expecting sales to decrease and 18% projecting that profitability will worsen the indications are, that while Canadian CEOs show a declining confidence in economic conditions over the next 12 months, they are still optimistic about profits and sales.

The four most significant business issues being faced by Canadian CEOs this quarter are staffing, economic uncertainty (local and national), financial issues (finance, cash flow, profitability), and the rise in the value of the Canadian Dollar against the U.S. Dollar. Staffing is identified in 30% of the responses. 51% say they will increase staff, 39% say they will not make any staff changes, and 10% say they will reduce staff over the next 12 months. The second most common business issue is economic uncertainty and this is identified by 19%. 13% say financial issues including finance, cash flow, and profitability is the number one issue, while another 13% identify the rise in the value of the Canadian Dollar against the U.S. Dollar as the most significant issue their businesses are currently facing.

More than half (58%) of Canadian CEOs taking the survey believe that the Canadian economy is heading towards a market correction in 2008. 31% say "no" to a market correction and 18% say we are heading into a recession. In addition, the top two responses on how business is adjusting to the current challenging economic conditions show 48% are ramping up marketing initiatives and 26% are saving cash. Only 9% say they are reducing staff to adjust to the present economic conditions.

Set amid economic uncertainty, the first quarter of 2008 indicates Canadian CEOs are predicting that the upcoming year is one they will approach with a degree of caution.

For over four years, the TEC Confidence Index has forecasted annual changes in the economy, including job creation and price increases. The quarterly survey continues to serve as an accurate snapshot of Canada's economic landscape.

One hundred and seventy-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


Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2006 2006 2006 2006 2007 2007 2007 2007 2008

Index Score: 122.4 117.6 118.5 108.8 109.6 112.2 107.3 95.6 90.5

Current Economic
Conditions 134 142 134 94 98 114 102 76 54
Expected
Economic
Conditions 119 110 106 80 94 100 83 72 55
Planned Fixed
Investment 146 144 147 149 176 146 141 136 141
Planned Revenue
Growth 181 167 177 173 156 140 139 118 115
Expected Profit
Growth 155 143 147 148 135 171 168 158 154
Expected Change
in Employment 158 151 154 150 141 149 148 137 139


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 Q1 2008 TEC Confidence Index is a compilation of responses from 175 Canadian CEOs of small to mid-sized companies, surveyed Friday, February 15, 2008 - Monday, February 25, 2008. 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), presidents, 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 strategic 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
Q1 2008

175 Respondents - 33.27% Response Rate
Margin of Error +/- 7.4%
Friday, February 15, 2008- Monday, February 25, 2008

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 16 9%
Remained the same 63 36%
Worsened 96 55%
Total Responses 175

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 11 6%
About the same 74 42%
Worse 90 51%
Total Responses 175

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 63 36%
Remain about the same 76 43%
Decrease 36 21%
Total Responses 175

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 114 65%
Remain about the same 43 25%
Decrease 18 10%
Total Responses 175

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 100 57%
Remain about the same 44 25%
Worsen 31 18%
Total Responses 175

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 66 38%
Remain about the same 90 51%
Decrease 19 11%
Total Responses 175

7. What is the most significant business issue that you are currently
facing?
Response Total Response Percent
Rise in the Canadian Dollar value vs.
the U.S. Dollar 22 13%
Rising energy costs 2 1%
Staffing (finding, hiring, retaining,
and training) 53 30%
Growth (growing too slowly) 17 10%
Growth (growing too quickly) 9 5%
Financial issues (finance, cash flow,
profitability) 22 13%
Other 13 7%
Economic uncertainty (concern for local
and national) 34 19%
Political uncertainty 3 2%
Total Responses 175


8. 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 89 51%
Remain about the same 69 39%
Decrease 17 10%
Total Responses 175

9. When do you plan to increase your firm's total number of employees over
the next 12 months?
Response Total Response Percent
Q2 2008 39 22%
Q3 2008 12 7%
Q4 2008 6 3%
Steadily throughout the next 12
months 51 29%
I do not plan to increase my total
number of employees over the next
12 months 67 38%
Total Responses 175

10. Do you plan on decreasing your firm's total number of employees in 2008?

Response Total Response Percent
Yes, in Q2 2008 10 6%
Yes, in Q3 2008 2 1%
Yes, in Q4 2008 2 1%
Yes, steadily throughout
2008 9 5%
No 148 85%
Skipped 4 2%
Total Responses 175

11. Do you believe Canada's economy is headed towards a market correction in
2008?

Response Total Response Percent
Yes 102 58%
No 55 31%
We are heading into a
recession 18 10%
Total Responses 175

12. How is your business adjusting to the current challenging economic
conditions? (Check all that apply)
Response Total Response Percent
Saving cash 64 26%
Reducing number of employees 21 9%
Ramping up marketing initiatives 116 48%
Cutting back marketing initiatives 5 2%
Selling off or closing out
product(s) or service(s) 15 6%
Selling off capital assets 7 3%
Preparing to liquidate the business 2 1%
Skipped 14 6%
Total Responses 244

13. Have the Bank of Canada's interest rate cuts made it easier for you to
borrow money and fund your company's capital finances?

Response Total Response Percent
Yes 33 19%
No 49 28%
Not applicable 93 53%
Total Responses 175

14. Is your company doing business internationally?

Response Total Response Percent
Yes 88 50%
No 81 46%
No, but I plan to in 2008 6 3%
Total Responses 175

15. If you plan to do business internationally, where are you considering
doing business? Please list

Response Total Response Percent
Skipped 118 67%
Number of Respondents (giving 128
locations) 57 33%
Total Responses 175

Response breakdown where international business is
being considered for:
USA 36
Europe 30
Asia 23
Central America, South America,
Latin America, Mexico 12
Australia/New Zealand 10
Other 17
Total Responses 128

16. If you are doing business internationally, is it helping you weather the
economic slowdown?

Response Total Response Percent
Yes 49 28%
No 50 29%
Skipped 76 43%
Total Responses 175

17. Do you read industry blogs?

Response Total Response Percent
Yes 43 25%
No 131 75%
Skipped 1 1%
Total Responses 175

18. Does your company check a job candidate's profile on social media sites
such as Facebook, MySpace and LinkedIn?

Response Total Response Percent
Yes 28 16%
No 146 83%
Skipped 1 1%
Total Responses 175


Two related graphs are available through Marketwire at the following address: http://media3.marketwire.com/docs/307TEC.pdf.

Contact Information

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