Canada named 'top five destination' for global investment
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Canada has been ranked the world's fifth best investment destination thanks to improving macro economic indicators and growing optimism, according to a new survey of business executives.
Commissioned by accounting firm Ernst & Young, the Canadian Capital Confidence Barometer survey is the second consecutive study to rank Canada among the world's top five investment destinations, as part of a wider capital shift towards more developed economies.
According to the report, the country's improved reputation among investment experts is partly due to a perceived increase in geopolitical risk in developing countries, as well as its proximity to the United States and the bright future of oil and gas investment across the country thanks to rising commodity prices.
Commenting on the country's prospects for international investors, Doug Jenkinson, a partner at EY's Transaction Advisory Services practice based in Toronto, added: "Last year at this time, only 10% of our Canadian survey respondents saw the Canadian economy improving. This year, that number has jumped to 54% — an impressive increase in a short time."
"For the fifth time in a row, our survey finds Canadian respondents expect to pursue acquisitions at a rate above the past average. Canadian, U.S. and global respondents are bullish on the Canadian and global economy, and that is fuelling an appetite for M&A," he added: "The Canadian economy is strong which is helping to drive the M&A market overall. By harnessing innovations we have a real opportunity to continue to show the world we are open to investment and growing."
The survey collected the opinions of 2,300 global business executives from across 14 industries, 58 per cent of which were C-level managers. The United States was found to be the top investment destination, followed by China, the United Kingdom and Germany, respectively.
In terms of their outlook for the global economy, 64 per cent of respondents suggested that they felt it was improving, while 32 per cent said it was stable and four per cent felt it was declining. Around 57 per cent also revealed that they had seen their corporate earnings increase, while 40 per cent saw them remain stable.
According to the report, the biggest concern among respondents was market volatility and political risk in developing nations, with volatility in commodities, currencies and other capital markets cited as the biggest perceived business risk among respondents, at 19 per cent.
The second largest concern was found to be policy shifts, with 15 per cent stating that they believe government intervention is the biggest risk to investment. However, 10 per cent of respondents also highlighted the nationalistic US trade policy as a worry, following news that the Trump administration is considering walking away from the North American Free Trade Agreement.
Overall, 69 per cent of those surveyed stated that some form of geopolitical risk or change was the single largest threat to their business, despite maintaining an optimistic view of the future of the world's economy and global investment market.