A survey of 240 CEOs and CFOs by accounting and consulting firm PricewaterhouseCoopers indicates that a majority of US corporate executives believe the economy will improve in the next 12 months. Of those surveyed, 60% think the US economy will improve and just 8% think it will not. The remaining 32% are uncertain.
The outlook for the global economy is not quite so bright, with just 29% predicting improvement and 10% expecting a decline. The remaining 61% are uncertain. Given the results of recent elections in France, Greece, and Germany, perhaps uncertainty is the best call.
A PricewaterhouseCoopers executive noted:
Last year, we saw confidence [in the US economy] plummet to 27% on the heels of policymaking gridlock and the S&P’s downgrade of the US debt rating. While we don’t anticipate a repeat of last year, these are still volatile times, and so optimism about the US economy may continue to fluctuate.
The survey also noted the importance of emerging economies in the revenue picture for glboal companies. Profit growth of about 9% is expected globally, with most of that coming from emerging economies, not the tempestuous Eurozone. On the whole, 90% of corporate executives surveyed expect to see revenue growth this year. Overall revenue growth is forecast at 9.5%, with 9.9% coming from domestic US markets.
On the employment front, 59% of companies expect to hire more people this year, while 38% expect no change and just 3% expect to lay off workers. PricewaterhouseCoopers notes that it expects employment growth to occur “at the margins” as about a quarter of the companies say that they are unable to grow because they cannot find qualified employees.
Private companies are also wary about lack of demand, with 68% citing this as a concern for the next 12 months. Almost half — 46% — are concerned that regulatory and legislative changes will weigh on profits and 38% cite energy prices as a concern. And 24% cite the higher wages needed to retain workers as another weight on profits.
The PwC Private Company Trendsetter Barometer press release is available here.