Canadian Trucking CFOs More Positive than Peers About Health of Their Industry, Says GE Capital Survey

Mississauga (ON) AND MONTREAL (QC) – The chief financial officers (CFOs) of Canadian trucking companies are more positive about the current state of their industry but less positive about the state of the world economy than most of their peers, according to the first Canadian Mid-Market CFO Survey by GE Capital, Canada. Trucking CFOs’ sentiment about the current state of the domestic economy is on par with their peers in other industries.

The survey, which took place during the first quarter of 2012, included responses from 186 CFOs of companies in three major industries in addition to trucking: Metals, mining and metals fabrication; food, beverage and agribusiness; and retail.

Among the 44 trucking CFOs who were surveyed, their average annual revenue was C$85 million. They’ve been in business nearly nine years and employ 346 people, on average. GE Capital conducted a similar survey of 495 U.S.-based CFOs during the first quarter of 2012.

Current views on health of U.S. and Canadian economies and industry
• U.S. transportation CFOs are less optimistic about the current state of their industry and the U.S. economy. Sentiment on the global economy has also declined. In fact, U.S. transportation CFOs are the least optimistic of all industries when it comes to the current state of the U.S. and world economies.

• Forty-seven percent of U.S. transportation CFOs say the U.S. economy will grow over the next 12 months, while 90 percent say their industry will grow or stay the same.

• Among Canadian transportation CFOs, 55 percent say their own economy will grow, while 34 percent say it will stay about the same and 11 percent say it will shrink. Half say their industry will stay about the same over the next 12 months and 48 percent say it will grow.

Growth and profit expectations
• When asked to describe the business phase their company will be in for the next one to three years, 59 percent said moderate, followed by 20% who said they predict a cyclical or limited growth phase.

• Nearly three-quarters (73 percent) expect their company’s revenues to increase this year — the most optimistic of all survey respondents.

• They’re divided on how their company’s profit margins will shift this year, with 41 percent expecting an increase and 45 percent expecting them to remain about the same.

• Confidence indicators: Cost structure, hiring, new orders and capital expenditures

• Forty-three percent expect their company’s cost structure to stay about the same in 2012 as in 2011; 34 percent expect it to increase.

• Fifty-nine percent of Canadian transportation CFOs say their new order pipeline performed better in the first quarter of this year versus the same period last year, while 30 percent say their pipeline remained the same.

• More than three-quarters (77 percent) said they’ve already begun hiring this year.

They are equally divided — 41 percent each — over whether their company’s amount of capital expenditures will be greater or about the same as in 2011.

Trucking-specific findings:
• When it comes to issues that can directly affect their business, transportation CFOs are most concerned about cash flow (48 percent). That’s followed by worries about the retention and recruitment of quality drivers as freight improves, and safety / truck accidents; each was selected by 45 percent of respondents.

• Their greatest business opportunities this year are acquiring new customers, selected by 68 percent of respondents, and increasing tonnage volume from existing customers, 55 percent.

Other key findings:
• The biggest internal challenge facing their company is talent / leadership development, cited by 56 percent of respondents. Service process improvements were the second-most cited challenge (50 percent).

• Half of transportation CFOs expect to increase the pricing of their services this year; 39 percent expect pricing to remain the same.

Editors’ note
Among the CFO surveys published, the GE Capital Canadian Mid-Market CFO Survey is one of the few that examines Canadian businesses across distinct sectors, providing a more comprehensive picture of how financial executives view the world today and their outlook for the months ahead. The CFOs surveyed represent companies with revenues ranging from $5.3 million to $3.6 billion.

About GE Capital
With more than 20 offices throughout Canada, GE Capital (gecapital.ca) offers a wide variety of financial products and services to address commercial financing and fleet management needs in all phases of a business’ lifecycle. From equipment finance to working capital and growth financing to large asset-based and restructuring loans, we apply our wealth of industry expertise to develop custom solutions for your company. Some of the industry sectors we specialize in include transportation, construction, healthcare, agriculture, forestry, manufacturing, oil and gas, wholesale and retail, and restaurant and hotel franchise.

GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visit gecapital.com or follow company news via Twitter (@GECapital). GE (NYSE: GE) is an advanced technology, services and finance company taking on the world’s toughest challenges.