Despite a downturn in markets and fears of a worsening economy, a new survey from PricewaterhouseCoopers (PwC) shows that most private companies are sticking to their long-term strategies and taking a measured approached.

And while confidence has fallen sharply and a third of private companies expect business to get “a lot” or “a little worse”, the majority continue to build plans that will offer growth and expansion even in uncertain times.

In 2007, 77% of Canada’s private companies expected business to get “a lot” or “a little better” in the next 12 months. In July of this year, the number had fallen to 68%, and by October, when private companies were resurveyed to reflect on the current state of the economic crisis, only just over half the respondents echoed the same confidence.

“While confidence is down it is by no means out,” says Eric Andrew, PwC’s private company services Canadian leader. “Canadian private companies are dealing with what the market is throwing at them. Unlike U.S. counterparts, where until recently high consumer spending and resulting growth conditions south of the border made doing business a smoother ride, Canadian companies have been more cautious and had to work harder to refine and develop their businesses. This means when we hit bumps in the road, we tend to be better capitalized, and better prepared to deal with change.”

But despite all the gloom and doom reported in the world media, for Canadian private companies at least, for the fourth consecutive year, growth and expansion is the main strategy — even as late as mid-October — for over half the respondents. Those that changed their focus have moved to a more cautious plan for consolidation, but there are no indications yet that the overall number of Canadian companies in survival mode has increased.

In July, the data showed exchange rates issues had risen sharply to rank number one in top challenges and were being cited most prominently in the East. Forty-seven per cent of Ontario respondents and 52% of Quebec respondents ranked this as the number one challenge. For the third year running the biggest challenges in British Columbia and Alberta related to the recruitment of skilled staff and labour shortages, with 66% of Alberta companies ranking this as the number one challenge for the year ahead. In the last three months the landscape has changed dramatically. Labour issues have since fallen to fifth place behind exchange rates, competition, and profitability. Concerns over the future of the economy is now the number one challenge for private business owners.

“The good news is private companies across Canada are well positioned for future growth and proceeding cautiously with their plans,” says Andrew.

IE