Transportation CFOs Expect Growth, But No Increase in Profits

MISSISSAUGA ON. — Transportation, energy and retail CFOs are the most likely to expect growth going forward, according to a recent survey by GE Capital of 203 chief financial officers (CFOs) of Canadian middle-market companies.

And while transportation CFOs may be expecting growth, profits in the transportation industry are expected to stay the same, according to the survey.

The survey picks CFOs from five different industries: Energy, food, beverage, and agribusiness; metals, mining and metals fabrication, retail, and, of course, transportation.

The survey found that most of the CFOs are looking at the national economy, as well as their own industries, from a glass-is-half-full perspective. The outlook on the global economy, however, isn’t all rainbows and puppy dogs.

“CFOs’ top two immediate concerns are the potential impact of European fiscal conditions and the American economy,” GE noted, “although worries about the latter declined by five percentage points since the first quarter. Concerns about unemployment, oil prices and credit market liquidity also increased.”

Back at home, more than one-third of CFOs surveyed think the national economy will grow over the next twelve months while almost half (48 percent) expect the economy to stay the same — that’s down three points from GE’s last survey conducted in Q1 of 2012.

The biggest expected cost to business performance is — surprise, surprise — labour costs. The cost for oil and gas was next on the list, followed by materials, supplies and equipment.

Other findings:

  • The industry with the most positive outlook is retail; the most negative goes to metals and mining.
  • 72 percent of CFOs surveyed expect profits to either increase or hold steady this compared to last, although there has been no increase in the percentage of CFOs who expect profits to rise.
  • Food and beverage CFOs are the most likely to expect a decline.
  • Transportation CFOs are the most likely to expect profits to stay the same.
  • The majority of CFOs (73 percent) expect to hire over the next 12 months, and are anticipating growing their workforce by 7 percent.
  • Top two immediate concerns? The impact of European fiscal conditions and the American economy.


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