Executives’ Faith in Economy Wavers as Doubts about Growth Prospects, Labor Costs Rise
2010年8月18日 - 9:00PM
ビジネスワイヤ(英語)
Amid fears of a double-dip recession and slow macroeconomic
recovery, senior executives are once again feeling cautious about
the future business environment, according to the latest Business
Barometer survey released today by The Corporate Executive Board
(NASDAQ: EXBD) (CEB). Measuring the economic assumptions of more
than 400 executives across six functional business roles, the
quarterly survey revealed that companies will likely need to be
vigilant in responding to cost pressures and challenging labor
conditions, yet need to make investments in R&D and other areas
to stay competitive in the year ahead.
Dropping to a reading of 47.8 in Q3 from 51 in Q3 2010, the Q2
Business Barometer showed that optimism among business leaders
about the year ahead has wavered. While most executives say they
expect higher revenues for their companies this year (68 percent),
fewer are optimistic about their respective industries’ growth
prospects (only 50 percent say they expect their industries to
grow) and a majority are anxious about rising cost pressures (68
percent). However, executives remain cautiously optimistic about
increases in R&D spend and capital expenditures.
“The results of this quarter’s Business Barometer point to
increased uncertainty among businesses about the pace of the
economic recovery,” said Michael Griffin, managing director, Global
Research for the Finance and Strategy Practice at CEB. “While
fundamentals at large companies have recovered steadily across the
past year in terms of both top-line growth as well as margins,
executive concerns about the economic environment—especially the
strength of consumer demand—have returned. Many companies are
taking a wait-and-see approach, but history suggests that those who
undercut growth investments during economic trough periods risk
longer-term revenue stalls while those who make investments ahead
of peers are more likely to seize outsized returns.”
Areas for Vigilance
One of the biggest negative shifts in this quarter’s Business
Barometer reading was the extent to which executives view the
resilience of U.S. consumers, with only 38 percent of executives
expecting consumer confidence to improve, compared to 59 percent in
Q2. Executives also expect unemployment to linger, with 49 percent
anticipating numbers to stay the same, compared with 46 percent who
had that outlook in Q2.
Also surprising was the deterioration of sentiment among HR
executives regarding labor market conditions. Nearly two-thirds (64
percent) expect a moderate increase of one-to-four percent in
average labor costs this year. Forty-two percent expect average
health benefits to increase by one-to-nine percent, with 18 percent
expecting a higher than 10 percent increase. Compared to Q2 2010,
HR executives have dropped their expectations of employee
engagement (32 percent think employees will be less engaged) and
anticipate higher turnover (54 percent compared to 39 percent in
Q2).
In addition, growth prospects in the U.S. and EU have
deteriorated, with only 32 percent of executives seeing strong
economic growth in these industrialized economies (compared to 54
percent in Q2).
Areas of Cautious Optimism
On a brighter note, outlook among IT executives improved,
largely driven by the fact that 54 percent expect higher
discretionary CapEx IT spending (up from 47 percent in Q2).
Fifty-seven percent of IT executives expect spending on software to
increase (up from 45 percent in Q2). Moreover, finance and
operations executives remain largely optimistic about increasing
CapEx, and making long-term innovation bets, even though the
strength of the optimism retreated somewhat.
“Even though the overall outlook has moderated, there is still
resilience in key investment areas such as anticipated R&D and
IT CapEx,” said Oleg Polishchuk, senior director, Finance and
Strategy Practice at CEB. “Furthermore, executives expect higher
order volumes and plan to increase production levels.”
Additional notable findings from this quarter’s Business
Barometer include:
- A majority of finance executives
expect increases in the number of M&A deals this year; however,
optimism may be waning with the number dropping slightly (51
percent compared to 63 percent in Q2).
- While the majority of finance
executives expect to increase CAPEX, their number declined from 55
percent in Q2 to 51 percent in Q3.
- More than two-thirds of sales
executives (65 percent) expect rising sales to new customers this
year, with more than half (53 percent) expecting to see increases
among existing customers.
- Fifty-two percent of all
executives expect no changes in terms of access to credit.
- The number of executives who
expect interest rates to increase has dropped to 42 percent,
compared to 57 percent in Q2.
- Executives’ outlook on
production is positive, with 68 percent expecting a higher number
of new orders and 67 percent expecting expanded production over the
next 12 months (compared to 64 percent in Q2). However, the number
of product introductions may decrease with 52 percent expecting a
higher number of new products this year, compared to 65 percent who
had that outlook in Q2.
CEB’s Business Barometer is a forward-looking diffusion index of
expected business conditions, condensed from a survey of more than
440 senior executives in North America and Europe across 33
industries. The Business Barometer provides a unique measure of
business sentiment among a representative sample of CEB’s executive
member network. The index measures the assumptions of senior
executives across six functional disciplines, including HR,
corporate finance, operations, sales and marketing, real estate and
IT, on the impact 12 key business and economic indicators will have
on their business in the year ahead.
For more information on CEB’s Business Barometer, visit
http://cebviews.com/economic-outlook/.
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www.exbd.com.
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