PricewaterhouseCoopers' Survey Finds Leading CEOs Sour on Economy
NEW YORK -- According to a recent PricewaterhouseCoopers' Trendsetter Barometer survey, only one in four CEOs of the nation's fastest-growing private companies have a positive outlook on the economy.
This marks the first time in 16 years that optimism falls in the minority, a trend supported by survey statistics that underscore the CEOs positive outlook has dropped
59 percent over the last year. According to the findings, nearly 75 percent of surveyed CEOs responded they are uncertain or pessimistic about the U.S. economy over the next twelve months, up three points from the last quarter and a 100 percent increase from the same time last year.
"While optimism about the global economy has dropped, there has been no measurable decrease in international sales as a percentage of total sales among the respondents," Ken Esch, partner with PricewaterhouseCoopers Private Company Services practice, said in a released statement. "Exchange rates should continue to help U.S. exporters be competitive in foreign markets and diversification among several economies should help weather a lack of demand in the U.S."
Among concerns topping the list was lack of demand for oil with three out of four CEOs citing it as the No. 1 barrier to growth. Oil and energy prices was the second highest concern cited by 44 percent of surveyed companies (up from 34 percent last quarter and 25 percent one year ago); the availability of qualified workers was cited as a concern by only 40 percent of respondents (down from 45 percent last quarter and 53 percent one year ago). Also, the number of respondents expressing concerns about profitability over the next 12 months increased to 38 percent, (up from 32 percent last quarter and 26 percent last year).
"As a result of significant increases in commodity prices and fuel costs, many companies are negotiating price increases to restore or maintain profitability. Most customers can relate to the need for price increases because they feel the impact of increased costs
at the gas station and the grocery store," Esch said in a released statement. "Companies are also focused on reducing discretionary spending, such as travel, and improving productivity of the existing workforce to maintain profitability."
Adding to the gloomy outlook is a survey by the Nielsen Co., parent company of CSNews Online, which found 85 percent of U.S. consumers believe the country is in a recession. Thirty-five percent of respondents cited the economy as their biggest concern. Sixty-nine percent of U.S. consumers believe the next 12 months are either a bad or not so good time to buy things they want or need.
The PricewaterhouseCoopers survey found that capital investments were at 35 percent. Projected increased spending was down, with 68 percent planning increased spending versus 77 percent last quarter. On the international front, however, 78 percent of international marketers plan to increase spending over the next twelve months, compared to only 62 percent domestically.
"It's important that fast-growing companies continue to invest in their future through capital expenditures and key hiring, but the drop in the number of companies planning to increase spending is a cause for concern," Esch said in a released statement. "The time and money spent now to develop new products or services for your customers could translate to a strong competitive advantage when the current economic downturn ends. This is an opportunity to gain market share and leverage it for greater profitability in the next economic expansion."
This marks the first time in 16 years that optimism falls in the minority, a trend supported by survey statistics that underscore the CEOs positive outlook has dropped
59 percent over the last year. According to the findings, nearly 75 percent of surveyed CEOs responded they are uncertain or pessimistic about the U.S. economy over the next twelve months, up three points from the last quarter and a 100 percent increase from the same time last year.
"While optimism about the global economy has dropped, there has been no measurable decrease in international sales as a percentage of total sales among the respondents," Ken Esch, partner with PricewaterhouseCoopers Private Company Services practice, said in a released statement. "Exchange rates should continue to help U.S. exporters be competitive in foreign markets and diversification among several economies should help weather a lack of demand in the U.S."
Among concerns topping the list was lack of demand for oil with three out of four CEOs citing it as the No. 1 barrier to growth. Oil and energy prices was the second highest concern cited by 44 percent of surveyed companies (up from 34 percent last quarter and 25 percent one year ago); the availability of qualified workers was cited as a concern by only 40 percent of respondents (down from 45 percent last quarter and 53 percent one year ago). Also, the number of respondents expressing concerns about profitability over the next 12 months increased to 38 percent, (up from 32 percent last quarter and 26 percent last year).
"As a result of significant increases in commodity prices and fuel costs, many companies are negotiating price increases to restore or maintain profitability. Most customers can relate to the need for price increases because they feel the impact of increased costs
at the gas station and the grocery store," Esch said in a released statement. "Companies are also focused on reducing discretionary spending, such as travel, and improving productivity of the existing workforce to maintain profitability."
Adding to the gloomy outlook is a survey by the Nielsen Co., parent company of CSNews Online, which found 85 percent of U.S. consumers believe the country is in a recession. Thirty-five percent of respondents cited the economy as their biggest concern. Sixty-nine percent of U.S. consumers believe the next 12 months are either a bad or not so good time to buy things they want or need.
The PricewaterhouseCoopers survey found that capital investments were at 35 percent. Projected increased spending was down, with 68 percent planning increased spending versus 77 percent last quarter. On the international front, however, 78 percent of international marketers plan to increase spending over the next twelve months, compared to only 62 percent domestically.
"It's important that fast-growing companies continue to invest in their future through capital expenditures and key hiring, but the drop in the number of companies planning to increase spending is a cause for concern," Esch said in a released statement. "The time and money spent now to develop new products or services for your customers could translate to a strong competitive advantage when the current economic downturn ends. This is an opportunity to gain market share and leverage it for greater profitability in the next economic expansion."