Sometime in 2010 will mark the general recovery of the economy, according to a recent survey of CEOs and other executives in several industries. Separate surveys of finance executives — traditionally more conservative than their CEO counterparts — suggest cautious agreement. Recent surveys also generally reflect a reluctance by executives to engage in further layoffs — even as they agree that they are unlikely to resume hiring.
In a recent survey by KPMG of almost 400 CEOs and other C-level executives in the finance, technology, retail, and food-and-beverage industries, 76% said they expected business conditions in their sector to be better one year from now, though most also said employment levels would continue to be low.
The survey found that technology executives were the most bullish of the group, with two-thirds saying the industry would recover more quickly than the national economy as a whole. Only a third of executives in the financial-services and banking industry felt that confident about their own industry, though 72% expected stronger revenue within financial services.
In a hopeful sign for the consumer-dependent U.S. economy, 7 in 10 retail executives said they expected business conditions to be better in 2010, with 68% and 66% expecting improved revenue and profitability, respectively. About half said they anticipated their industry to recover ahead of the U.S. economy.
Meanwhile, a survey of certified public accountants in high-level finance positions such as CFO or controller found pessimism about the economy declining, but revealed that respondents continued to expect declines in revenue and employment.
According to that survey, released Wednesday by the American Institute of Certified Public Accountants and the University of North Carolina’s Kenan-Flagler Business School, 42% of 1,093 CPAs surveyed expected a decrease in revenue over the next 12 months, while 34% expected reductions in employment. Both numbers, however, were 11 percentage points lower than they were in the first quarter, suggesting that pessimism is waning. Forty-one percent of CPA executives expressed pessimism about the U.S. economy during the coming year, a decline of 12 percentage points from the prior quarter, when 53% of respondents said they were “pessimistic” or “very pessimistic.”
The report echoes the findings of the Duke University/CFO magazine Global Business Outlook Survey, released last month. While CFOs reported a marked increase in optimism compared with the prior quarter, they still planned to lay off employees and cut spending.
According to the Duke/CFO survey released in July, CFOs expected to reduce their workforces by 6% in the next 12 months, which could send unemployment as high as 12%. Finance executives also expected earnings to decline by 6%, and said they planned to reduce capital spending by 12%.
The Duke/CFO survey and AICPA/UNC surveys — both of which focused on finance executives — contained the strongest suggestions that workforce reductions may continue. In the KPMG survey, which focused on CEOs, only a small percentage of the respondents said they were considering or planning further head-count reductions.