Just 1 in 4 Canadian CEOs expect improved economic growth in 2024

Business leaders say GenAI will improve quality of products and services, but with a lot of risks, finds report

Just 1 in 4 Canadian CEOs expect improved economic growth in 2024

There is low optimism among business executives when it comes to Canada’s economic outlook this year, according to a recent PwC report.

Only 25% of Canadian CEOs expect economic growth will improve this year, an increase from 17% in 2023.

Despite the improvement, the outlook still pales when compared to the rest of the world: 44% of global respondents expect better times for their country’s economy.

Also, 55% of Canadian CEOs expect domestic economic growth will decline this year, compared to 37% of global CEOs who expect economic growth in their country to decline.

Meanwhile, fewer Canadian executives (32%) than global counterparts (45%) say their businesses may not be viable in 10 years. Both numbers, however, are up from 24% and 39%, respectively, from 2023.

"We are operating in a continued poly-crisis environment, further complicated by tough economic headwinds. Therefore, it is not surprising that Canadian CEOs are more pessimistic than their global counterparts when it comes to their outlook on economic growth," says Nicolas Marcoux, CEO, PwC Canada. "While a soft recessionary landing maybe anticipated, CEOs find themselves under increasing pressure to reinvent their organizations."

About three-quarters (74.1%) of Canadian small- and medium-sized businesses (SMBs) state they expect their businesses to grow between 1% and 20% in the next six months, according to a previous Zoho report.

The following factors have driven/will drive changes in the way employers create, deliver and capture value in the last five years/next three years, according to PwC’s survey of 4,702 CEOs across 105 countries and territories including 114 in Canada: 

Last five years

Factors

Next three years

46%

Technological change

50%

45%

Changes in customer preferences

49%

36%

Government regulation

44%

28%

Competitor actions

36%

22%

Climate change

26%

31%

Supply chain instability

25%

21%

Demographic shifts

27%

What are the benefits and risks of AI?

Amid the uncertain business climate, generative artificial intelligence (GenAI) may be employers’ saving grace, according to PwC’s report.

Overall, 50% of Canadian respondents say GenAI will improve the quality of their products and services in the next 12 months, while 59% believe it will significantly change the way their company creates, delivers and captures value in the years to come.

Over a third (36%) of Canadian respondents (versus 32% globally) say they’ve adopted the technology in the last 12 months, and only 14% believe it will lead their company to decrease its headcount in the next 12 months.

However, just 29% of Canadian CEOs (versus 41% globally) expect GenAI will increase revenues in the next 12 months.

Many Canadian employers also say GenAI is likely to increase the following risks in their company in the next 12 months:

  • cyber risk (68%)
  • misinformation (52%)
  • legal/reputational risks (47%)
  • bias towards customers or employees (31%)

“The findings speak to the tensions between the potential risks, uncertainties about the new technology and the pressure to move quickly to seize the opportunities. But they also reinforce the need for organizations to raise the stakes on their AI strategies,” reads part of PwC’s 27th Annual Global CEO Survey—Canadian insights. “A key focus of those strategies needs to be on the workforce, particularly when it comes to upskilling their people for the changes underway.” 

And Canadian CEOs appear to be aware of this challenge: 55% say GenAI will require significant upskilling of their workforce in the next three years, and 53% believe a lack of skills is inhibiting their organizations from changing the way it creates, delivers and captures value.

“Closing these skills gaps will be key, including when it comes to equipping employees to do their part in helping mitigate the increased risks CEOs foresee as a result of generative AI,” according to the report.

Over 90% of Canadians say that AI development should be guided by ethical principles, according to a previous TELUS report.

This is crucial, especially because many leaders and employees across the world don't think their organizations will implement AI responsibly at work, according to a previous Workday report.

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