CEO Optimism, Revenue Expectations Mean Coming Job Growth at Private Business
It seems pessimism is out and optimism is in for private-company CEOs, and, that is good news for resellers and job seekers alike. According to PricewaterhouseCoopers’ (PwC) new Private Company Trendsetter Barometer, which tracks business issues and standard industry practices of privately held U.S. businesses, the majority of CEOs are demonstrating confidence in the U.S. Economy for the first time since 2007. And even better news? Those private CEOs are planning to turn that confidence into real jobs over the next 12 months.
For the first time since the second quarter of 2007, a majority—51 percent—of the nation’s leading private companies expressed optimism about the prospects of the U.S. economy over the next 12 months – up 32 points from the same quarter in 2009.
Driven by their optimism, surveyed CEOs reset and increased their revenue projections over the next 12 months by 8.5 percent for those operating domestically. Those companies that also operated internationally increased revenue projections for the next 12 months by 11.8 percent.
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"As we've moved beyond the last few quarters, private business owners are more confident that the U.S. and global economies have hit rock bottom and are beginning to recover," says Ken Esch, a partner with PricewaterhouseCoopers' Private Company Services practice.
To that point more than three-quarters of privately-held businesses plan for positive revenue growth over the next year, and a whopping 38 percent expect that growth to reach into the double digits. Still, 5 percent forecast negative growth, and 17 percent expect no growth at all.
"We're now seeing more companies projecting growth. It's important to note, however, that these projections are still almost half of what private company CEOs were projecting in mid-year 2007," says Esch.
The PwC report found that gross margins are recovering, and as a result, a majority of those surveyed (53 percent) are planning to ratchet up their workforces. Surveyed CEOs project an average composite workforce increase of 1.5 percent – up from a paltry 0.4 percent last year.
When it comes to capital spending, new projects and major investments are on the horizon, according to the study. Approximately 32 percent—up 8 points from last year--of those surveyed plan major new investments of capital over the next 12 months, and that means new projects and more cash for IT investments.