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

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

March 08, 2005 10:00 ET

TEC International: Canadian CEOs' Confidence in Economy Below Confidence Level of This Time Last Year; CEOs Anticipate Revenue and Employment Growth for the Next 12 Months


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: T.E.C. (THE EXECUTIVE COMMITTEE) LTD.

MARCH 8, 2005 - 10:00 ET

TEC International: Canadian CEOs' Confidence in
Economy Below Confidence Level of This Time Last Year;
CEOs Anticipate Revenue and Employment Growth for the
Next 12 Months

CALGARY, ALBERTA--(CCNMatthews - March 8, 2005) - Chief executives'
confidence in the Canadian economy recovered slightly this quarter,
according to a survey released today by TEC International, the world's
largest membership organization of chief executives. This quarter's
confidence level of 116.2 is up from last quarter's 115.3, but is still
below the confidence level of this time last year.

This increase in confidence in the economy indicates that CEOs are
expecting the economy to expand in the upcoming 12 months. Eighty-three
percent of CEOs indicated they expect overall economic conditions to be
better or remain about the same during this period, compared to only 17
percent who expect the conditions to worsen. Additionally, 80 percent of
respondents expect their sales revenue to increase in the upcoming year,
further indicating expansion of the economy.

Expected hiring is also up by 9 percent this quarter over last, where
only 46 percent of CEOs anticipated adding new staff during the next 12
months. This upward trend is also seen in planned fixed investment
expenditures where 50 percent of respondents indicated an increase in
expenditures during this period.

The next 12 months also show promise for the Canadian dollar and
consumers. Of the CEOs who participated in the survey, 86 percent
anticipate that the loonie will either strengthen or maintain its
current value and only 41 percent plan to raise prices for their
products or services - an 18 percent decrease from Q3 of 2004.

The 2005 Q1 TEC Confidence Index also addressed additional topical,
economic and political issues, findings include:

- 46 percent of CEOs anticipate globalization will have positive effects
on their business; 19 percent of CEOs' plans include expansion into
China.

- 76 percent of CEOs are considering to or are currently developing new
products or services to introduce in 2005.

- 27 percent of CEOs list staffing, while 20 percent list growth issues,
as most significant to their business.

- 6 percent of CEOs will be will be adding staff in Q1 of 2005, 13
percent during Q2, 13 percent during Q3, 5 percent during Q4, and 28
percent plan to hire steadily over the course of the year.

- 48 percent of CEOs hire from business classified ads, while 26 percent
hire from schools, staffing firms and head hunters.

- 27 percent of CEOs anticipate selling their current company within the
next five years.

- 27 percent of CEOs have looked into acquiring or are currently
acquiring another company.

- 66 percent of CEOs expect their profitability to increase over the
next 12 months.

- 63 percent of CEOs said they achieved their revenue goals for 2004 and
55 percent said they achieved their profitability goals.

More than 170 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

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2003 2003 2003 2004 2004 2004 2004 2005

Index Score: 100.0 111.3 123.1 117.7 124.6 126.1 115.3 116.2

Current
Economic
Conditions 81 83 125 116 155 137 145 125
Expected
Economic
Conditions 100 144 149 142 137 129 113 109
Planned Fixed
Investment 124 132 137 139 139 154 128 136
Planned
Revenue Growth 164 163 176 168 171 181 165 174
Expected
Profit Growth 141 153 166 153 160 166 156 156
Expected Change
in Employment 119 135 146 141 147 154 135 147


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 $1 billion
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 2005 TEC Confidence Index is a compilation of responses from more
than 170 Canadian CEOs of small to mid-sized companies, surveyed
February 21 - February 28, 2005. The TEC Confidence Index is the only
comprehensive report of their opinions and projections. TEC
International, the world's largest membership of chief executives,
conducts the TEC Confidence Index quarterly.

ABOUT TEC CANADA

T.E.C. (The Executive Committee) Ltd. is an international organization
for chief executives (CEOs), managing directors, business owners and/or
bottom line decision makers offering confidential business advisory
sessions and professional support. TEC was established in Canada in 1985
and currently has over 600 members in 14 cities.

Members are placed in groups with non-competing peers to gain insights
and learn from each other's business experiences. Each group is led in a
one-day session by a TEC chair, a highly experienced business
professional with specialized mentoring skills. The chair also holds
one-to-one sessions with each member of the group to address individual
needs. For more information, visit www.tec-canada.com or call 1(800)
661-9209.

ABOUT TEC INTERNATIONAL

TEC International, the world's largest membership of chief executives,
helps companies solve business problems, achieve better results and
outperform the competition. Since 1957, only TEC 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 10,000 business leaders.
TEC-member companies grow, on average, at a rate 2.5 times faster than
they did prior to joining. For more information, visit www.teconline.com.



TEC Confidence Index
Q1 2005

173 Respondents - 51% Response Rate
Margin of Error +/- 7.5%
February 21 - February 28, 2005

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

Response Total Response Percent
a. Improved 67 39%
b. About the same 83 48%
c. Worsened 23 13%
Total Respondents 173

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
a. Better 44 25%
b. About the same 100 58%
c. Worse 29 17%
Total Respondents 173

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
a. Increase 86 50%
b. About the same 64 37%
c. Decrease 23 13%
Total Respondents 173

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
a. Increase 138 80%
b. About the same 25 14%
c. Decrease 10 6%
Total Respondents 173

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
a. Improve 115 66%
b. About the same 40 23%
c. Worsen 18 10%
Total Respondents 173

6. 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
a. Increase 95 55%
b. About the same 64 37%
c. Decrease 14 8%
Total Respondents 173

7. Do you expect the value of the Canadian dollar, compared with the
U.S. dollar, to be stronger, about the same, or weaker during the next
12 months?

Response Total Response Percent
a. Stronger 65 38%
b. About the same 83 48%
c. Weaker 25 14%
Total Respondents 173

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

Response Total Response Percent
a. Increase 71 41%
b. About the same 83 48%
c. Decrease 18 10%
Total Respondents 172

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

Response Total Response Percent
a. Q1 2005 10 6%
b. Q2 2005 23 13%
c. Q3 2005 23 13%
d. Q4 2005 8 5%
e. Steadily over Qs 1, 2, 3 and 4 of
2005 48 28%
f. I do not plan to increase my total
number of employees over the next
12 months 60 35%
Total Respondents 172

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

Response Total Response Percent
a. Oil/energy prices 15 9%
b. Healthcare costs 0 0%
c. Lack of qualified candidates 59 34%
d. Rise of the Canadian dollar 27 16%
e. Uncertainty of the growth rate of
the overall economy 9 5%
f. Offshoring (outsourcing outside of
Canada) 4 2%
g. None of the above have impacted
hiring in the last five months 41 24%
h. Other 18 10%
Total Respondents 173

11. What is the main impediment, if any, of job creation for your
business?

Response Total Response Percent
a. Cost of business (energy, raw
materials, healthcare/worker's
compensation) 14 8%
b. Growth (concerns with increasing
growth, and growing too quickly) 42 25%
c. Financial issues (capital, cash
flow, profitability) 35 20%
d. Economic uncertainty (concern for
local and national economy,
increasing interest rates and
strength of Canadian dollar) 34 20%
e. There is no impediment of job
creation for my business 23 13%
f. Other 23 13%
Total Respondents 171

12. From where do you hire most employees?

Response Total Response Percent
a. Schools (college/university,
graduate, vocational) 19 11%
b. Head hunters 11 6%
c. Staffing firms 16 9%
d. Business classified ads 82 48%
e. Other 42 25%
Total Respondents 170

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

Response Total Response Percent
a. Cost of business (energy, raw
materials, healthcare/worker's
compensation) 13 8%
b. Staffing (hiring and retaining
trained, quality employees) 47 27%
c. Growth (concerns with increasing
growth, and growing too quickly) 34 20%
d. Financial issues (capital, cash
flow, profitability) 31 18%
e. Economic uncertainty (concern for
local and national economy,
increasing interest rates and
strength of Canadian dollar) 31 18%
f. Other 15 9%
Total Respondents 171

14. Do your business plans for 2005 include mergers and acquisitions?

Response Total Response Percent
a. Yes, I have been approached by
another company interested in my
company 7 4%
b. Yes, I have looked to acquire
companies 32 19%
c. Yes, I am merging with larger
company 2 1%
d. Yes, I am acquiring another
company 14 8%
e. Yes, I am expanding strategic
partnerships 21 12%
f. No, I am not considering merging
or acquiring at this time 96 56%
Total Respondents 172

15 a. Do your business plans over the next five years include selling
your current company?

Response Total Response Percent
a. Yes, I plan to sell my company
within the next five years 46 27%
b. No, I don't plan to sell my
company within the next five
years 126 73%
Total Respondents 172

15 b. If yes, have you created / implemented a succession plan?

Response Total Response Percent
a. Yes, I have created and
implemented a succession plan 17 14%
b. Yes, I have created, but not
implemented a succession plan 12 10%
c. I am currently creating a
succession plan 41 34%
d. No, I have not created a
succession plan 49 41%
Total Respondents 119

16. If short-term interest rates increase, it will: (please check all
that apply)

Response Total Response Percent
a. Change my investment strategy 47 24%
b. Change my buying patterns 29 15%
c. Change my hiring patterns 15 8%
d. Effect my bottom line 94 47%
e. Other 14 7%
Total Respondents 199

17. Did you achieve your revenue goals in 2004?

Response Total Response Percent
a. Yes 109 63%
b. No 64 37%
Total Respondents 173

18. Did you achieve your profitability goals in 2004?

Response Total Response Percent
a. Yes 94 55%
b. No 77 45%
Total Respondents 171

19. I plan to grow my business in 2005 by:

Response Total Response Percent
a. 0-5% 27 16%
b. 5-10% 46 27%
c. 10-15% 46 27%
d. 15-20% 15 9%
e. 20-25% 15 9%
f. 25% or more 24 14%
Total Respondents 173

20. Are you considering diversifying your business by developing new
products or services in 2005?

Response Total Response Percent
a. Yes, I am currently developing new
products or services for
introduction in 2005 106 62%
b. Yes, I am considering developing
new products or services for 2005 25 14%
c. No, I am not considering developing
new products or services in 2005 41 24%
Total Respondents 172

21. What effect will globalization have on your business in the next 5
years?

Response Total Response Percent
a. Strong positive effect 19 11%
b. Mild positive effect 61 35%
c. No effect 38 22%
d. Mild negative effect 47 27%
e. Strong negative effect 7 4%
Total Respondents 172

22. Do your business plans include expansion into the Chinese market?

Response Total Response Percent
a. Yes, I plan to expand into the
Chinese market this year 10 6%
b. Yes, I plan to expand into the
Chinese market within the next 5
years 23 13%
c. No, I've already expanded my
business into the Chinese market 5 3%
d. No, I don't plan to expand into
the Chinese market 135 78%
Total Respondents 173



NOTE: Two graphs are viewable on the CCNMatthews' website at the
following link:

http://www2.ccnmatthews.com/database/fax/2000/308tec.doc

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    TEC Canada
    Catherine M. Robertson
    1-800-661-9209 / (403) 262-1010
    Email: ceoindex@tec-canada.com