Cautious optimism from US CEOs

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By: Wise Marketer Staff |

Posted on April 23, 2002

Two new surveys have asked CEOs what they feel about growth prospects over the next year. They are increasingly optimistic, but with a touch of caution.

US middle market companies are optimistic about their growth prospects, according to a national survey of 400 CEOs released today by Harris Nesbitt, Chicago-based corporate and investment banking arm of the Bank of Montreal Group of Companies. Four in ten plan to increase capital expenditures in 2002 (mainly new technologies, new equipment and employee training), while one in three intend to increase their payrolls.

While 92% plan to boost revenues by attracting new customers and 82% intend to focus on existing customers, 56% also plan to launch new products or services in 2002. In addition, 48% will reach out to new markets, 40% will enter into an alliance or joint venture, and 29% will attempt to acquire another company.

Trendsetter companies
Meanwhile, a separate survey of the CEOs of the US's fastest growing companies is a bit more muted. PricewaterhouseCooper's Trendsetter Barometer reveals that these CEOs are a bit more cautious. And while their expectations for the US economy have rebounded, fewer than one in three have so far noticed changes for the better. The number who are optimistic about the US economy is rising quickly: 41% a year ago, 56% in the fourth quarter of 2001 and 67% this February and March. And the number who are pessimistic is falling just as quickly: from 21% to 14% to only 6%.

According to PricewaterhouseCooper's Steve Hamm, "There is the expectation of a sea  change sometime over the next 12 months, but not much of a sense that the tide has begun to turn yet. Although most of these CEOs believe that change is coming, they have not yet seen it for themselves." 

Cautious optimism
Despite their increasing optimism, two in three - across the board -remain concerned about the possibility of weak demand over the next year. Other prospective barriers to growth include lack of capital for investment and legislative or regulatory pressures.  And despite notching up their growth estimates, they aren't planning corresponding increases in major new business investments. However, about half of CEOs expect to boost their IT budgets - an indication that they are planning to increase their focus on on IT productivity in the year ahead. More than two thirds are planning to take on more staff over the next year. In the service sector this is up to four in five.