Canada’s senior financial executives predict growth despite geopolitical and economic concerns

Paul Roman, Vice President and General Manager of Global Commercial Services, American Express Canada

From navigating new global trade regulations, to weathering economic fluctuations and managing the effect of disruptive technologies, there’s no shortage of challenges facing finance leaders in some of Canada’s largest corporate organizations. Yet, while the global business might be increasingly difficult to navigate, Canada’s financial C-Suite remain optimistic and focused on growth.

These insights come from the results of the latest Global Business and Spending Outlook Study from American Express, a yearly survey of Canadian financial executives to better understand how they are approaching topics ranging from technology and automation, to global trade and operations.

The report revealed that financial executives are increasing global trade activities, improving working capital management and adopting new technologies as part of a strategy to not only shield their organizations from external challenges, but set them on a path towards growth.

Global risks leave financial executives concerned

It’s no surprise geopolitical threats rank high on a list of concerns for Canadian financial executives considering the current climate. Nearly two-thirds (70 per cent) of those surveyed shared their growing concerns for how unanticipated surprise events could negatively affect their business.

According to the results, more than half of Canadian senior financial executives surveyed agreed these global threats were directly tied to their more cautious approach to spending and investment increases. In fact, this year’s report revealed only 33 per cent of executives plan to increase spending by more than ten per cent, showing how CFOs are taking a measured approach to steadily improve profitability. Despite caution towards spending and global threats, CFOs continue to take action.

Despite concerns, global trade seen as a growth driver  

Canadian senior financial executives are extremely focused on international expansion. More specifically, 7 out of 10 senior financial executives expect exports to become even more important for their company’s growth this year. In spite of any concerns over global political and economic issues, it is clear senior financial executives see the value in not only maintaining, but expanding, business with organizations outside of Canada.

Further to this, more than two-thirds of senior financial executives (67 per cent) see a correlation between growth and securing imports from external suppliers and vendors outside Canada. This dramatic increase from the 2018 survey, where only 30 per cent of executives stated imports were vital for growth, illustrates how Canadian senior financial executives are making concerted effort to increase imports to sustain expansion.

Sourcing improved finance methods becomes priority

If there is one strategy for growth that senior financial executives understand best, it is prioritizing optimal cash flow and working capital sources. That said, it came as no surprise that the survey results reflected a near-unanimous response when it came to the value of improving cash and working-capital management – with 97 per cent stating it will be more important for their company than last year. Surprisingly, this result is four-times higher than last year’s, with only 23 per cent of executives claiming a focus on cash flow and working capital was more important for business than the previous year.

In addition to understanding the importance of securing solid prospects for sourcing capital, a vast majority of senior executives (87 per cent) also agreed that negotiating with suppliers and customers has a positive impact on working capital and can yield substantial financial benefits. This demonstrates the benefits of strategic planning and how strong relationships with customers and vendors can positively impact cash flow.

Investment in Next Gen technology prepares businesses for growth

The ever-changing technology landscape can be difficult to navigate for some organization. With 47 per cent of executives understanding that next-gen technology will cause a major disruption to the competitive dynamics of their industry, it’s clear that more and more businesses are beginning to consider it a higher priority. In fact, Canada’s c-suite appear to already be investing in next-generation technology, with artificial intelligence (57 per cent) and the Internet of Things (50 per cent) being the top tools. As a result of these investments, 35 per cent of senior financial executives are already experiencing the benefit artificial intelligence has on their company.

Finance executives also understand that in order to effectively implement new technology, they have to hire the right talent, with the right skills. In fact, nearly one-third (30 per cent) of executives plan to spend aggressively on hiring new employees with technology and automation expertise. In addition to hiring new talent, almost half will invest in training current employees this year to build up a more robust team of knowledgeable employees.

In today’s business, economic and political landscape, it’s more important than ever for to invest in proactive solutions to remain competitive and ensure long-term growth. Today’s CFOs are doing just that. From taking measures to protect their organizations against external threats, to a renewed focus on working capital management and investing top talent, Canadian financial executives are making strategic shifts to sustain growth this year and in the future.

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