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Canadian businesses more optimistic than most

Published by Steve Coleman on December 13, 2011

While a new business survey says most countries now see the glass as half empty, Canadian business owners are still very much optimists about the future.

On a global scale, only three per cent more businesses saw good things in their future during the third quarter of 2011. Numbers from the Grant Thornton International's latest International Business Report say the total number of yeas were 31 per cent more than the nays a quarter earlier.

Canadian optimism was still a strong 60 per cent, compared to the 80 per cent mark a quarter earlier.

By comparison, the number of optimistic respondents in both India and China declined 29 percentage points. In the United States, the number fell from 41 per cent to minus two per cent, while the EU fell to zero - an even 50/50 split.

"The European sovereign debt crisis is a major contributor to the lack of confidence felt in emerging economies," said Bill Brushett, National Client Services Partner, Grant Thornton LLP in Canada. "In Canada, businesses remain cautious because of the uncertainty in the global economy, but - relative to countries around the world - has remained remarkably optimistic in the face of uncertainty."

Grant Thornton says the numbers are the worst since the 2009 recession. Even worse, negative thoughts about what the future could help bad things happen.

Globally, business expectations for employment, revenue and profits fell by 11, 10 and nine percentage points respectively. Canadian expectations for employment stayed the same and revenue projections fell one per cent. Profit expectations increased 10 per cent.

While a demand shortage was cited as the biggest problem in other countries, Canadian businesses were more likely to a skilled worker shortage (35 per cent) and regulations/red tape (26 per cent) as the biggest obstacles to growth.

Canadian workers can also expect a happy new year. The survey said 87 per cent of businesses were planning to hand out pay raises this year, compared to 76 per cent last year. Eighty-nine per cent of companies planning to pay their employees more say the raise will be at least in line with inflation.

Over the next 12 months, 51 percent of Canadian businesses predicted revenue will rise over the next year. Forty-eight per cent expected profitability to increase and 34 per cent said selling prices will rise.

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