Canadian private companies surveyed by consulting firm PricewaterhouseCoopers are forecasting a 7.6 per cent growth rate for the coming year, an outlook PwC warns might be overly optimistic given that Canada’s GDP is forecast to grow just over two per cent in the coming year.
The management consulting firm surveyed 350 leaders of privately held Canadian businesses from a wide range of sectors during the summer for its Business Insights survey.
The optimism expressed this year is the highest it's been since PwC began doing the survey in 2005.
"The strong growth outlook is somewhat of a surprise," says Tahir Ayub, leader of PwC's Canadian private company services division.
Look to Canada for growth
Most companies are looking to the domestic market for growth in the next year. Canada's economy grew at an annualized rate of 1.7 per cent in the second quarter of this year, and government forecasts aim for about 2.5 per cent growth in 2014.
PwC points to several factors that could hold back the kind of expansion that business leaders are expecting, among them a slow economy, shortages of skilled staff and slow demand for products or services.
At least a quarter of those surveyed expressed concern about those factors but still remained optimistic.
"While private business leaders are confident, the past five years have educated the business community that nothing is certain when it comes to the economy, and a downshift would always be a major threat to growth," Ayub said in a press statement.
"Private company leaders need to be agile and frequently revisit their growth strategies to respond effectively to current market conditions."
About 44 per cent of private companies indicated they plan to achieve expansion through improved sales and marketing and 38 per cent through improving customer experience. Another 31 per cent had plans for new products and services.
Small business confidence high
While the PWC report covered businesses of all sizes, a Canadian Federation of Independent Business survey showed a generally high level of confidence among Canadian small businesses.
However, confidence did slip slightly in September compared to August, according to a report released Thursday.
The CFIB says the confidence index slipped 1.4 points from August to 64.5, with any reading over 50 suggesting optimistic business owners outnumber those expecting a weaker performance.
Newfoundland and Labrador (with a confidence index of 72.2), Alberta (at 71.6) and Saskatchewan (at 70.7) lead the way in terms of small business confidence.
Ontario's confidence level has surged in recent months, peaking in August at 67.8, but dropped sharply in the past month to 63.6.
There was a decline in confidence in New Brunswick and Prince Edward Island, and Quebec remained well below the national average at 59.2.
"Hiring plans are typical for this time of year, 40 per cent of small business owners report a generally good state of business, and orders and accounts receivables show gradual improvement,” said CFIB chief economist and vice-president Ted Mallett.
"Price and wage expectations are stable, and there are no big shifts being reported in operating constraints or pricing pressures."