Canadian private companies are forecasting a 7.6 percent growth rate for the year ahead, according to a report by PricewaterhouseCoopers (PwC), a prediction that PwC says might be too optimistic given that the national GDP growth forecast is 2 percent.
According to the report, 78 percent of the over 350 private companies polled expect business to get better over the next 12 months. The number of companies anticipating growth and expansion has increased since PwC started its yearly survey in 2005.
About 44 percent of companies said they intend to achieve growth and expansion through improved sales and marketing, 38 percent through improved customer experience and retention, and 31 percent through development of new products and services.
Most of the companies are looking at the domestic market for their growth, and the majority are focused on expanding their customer base, improving operational effectiveness, and improving customer experience, retention, and loyalty.
“All of these are reasonable strategies; however, the approaches haven’t changed considerably over the years,” Tahir Ayub, PwC’s Canadian private company services leader, said in a statement.
“The question then becomes whether these traditional growth strategies will be enough for Canadian private companies to effectively compete long-term in a progressively competitive business landscape.”
The report said the primary barriers for growth for the next year include lack of activity in the economy, labour shortages and recruitment of skilled staff, and demand for products and services.
Given these barriers, as well as increased competition and decreasing market share, companies cannot achieve their “aggressive” targeted growth rate through local expansion, said Ayub.
He added that “company leaders need to be agile and frequently revisit their growth strategies to respond effectively to current market conditions.”