Mining CFOs more pessimistic than the rest of Canada’s financial officers

A lot gloomier than any other Canadian chief financial officer (CFO) are those executives working for mining companies, reveals industry-specific data published Tuesday by GE Capital as part of its Bi-Annual Mid-Market CFO Survey.

More than half of the mining CFOs surveyed during the third quarter of 2012 think the Canadian economy will stay about the same over the next 12 months, while 27% of them believe it will shrink. In comparison, over a third (38%) of all the CFOs interviewed said the country’s economy would grow over the next 12 months.

When it comes to industry growth, the results are not better. Almost half of the mining executives (46%) said the sector would stay about the same over the next 12 months, which is down 13 percentage points since the last survey in this series, conducted in the first quarter of 2012.

Most Canadian mining CFOs (54%) expect their companies to stay on a cyclical-limited growth phase over the next 1 to 3 years, which consolidates them as the most pessimistic of all those surveyed by GE Capital.

Mining CFOs’ top immediate concerns are energy and labour costs. Over 80% said the price of oil and gas will have a negative impact in their business, while 75% cited labour costs.

Over the next 12 months, 84% of the mining and metals CFOs surveyed do not see their company using hedging due to the significant volatility in metals prices.

They also do not see an increase in metals-related imports as a competitive threat to their company over the next 12 months (86% of them).

Compared to three months ago, 38% of metals financial officers said their order lead times were decreasing, while 30% said they were actually increasing.

GE Capital, Americas provides loans and leases to middle-market companies in Canada. Among the CFO surveys published in Canada, the GE Capital Middle-Market CFO Survey is one of the few that examines businesses across different sectors, providing a more inclusive picture of how financial executives view the world today and their outlook for the months ahead.

The executive summary for the general CFO survey can be downloaded here.

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