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Survey: Top US CEOs More Upbeat On US Economic Outlook
DOW JONES NEWSWIRES
By Deborah Lagomarsino
Of DOW JONES NEWSWIRES
WASHINGTON -- Top executives at U.S. multinational companies have turned sharply upbeat about prospects for the U.S. economy over the next year, a new survey shows.
Of the 150 senior executives polled in May and June for PricewaterhouseCoopers' Management Barometer quarterly survey, 63% said they were optimistic on the economy, up sharply from 34% in the first quarter, the survey showed.
"For the first time in four consecutive quarters, more than half of executives have a positive outlook toward business in the upcoming 12 months," said Frank Brown, PricewaterhouseCoopers' global leader for Assurance and Business Advisory Services.
"Companies may be ready to break out of the wait-and-see pattern and begin building inventories, placing orders, and making new investments. That's good news. The big question is how soon they will make a commitment," Brown said.
The percentage of executives who say they are optimistic about the economy is at its highest level in a year, the survey shows.
Of those surveyed, 42% said they were optimistic about the world economy, up from 28% in the previous quarter.
The percentage of executives who say they plan to increase their investments rose to 41% in the second quarter, its highest level in a year, from 37% in the first quarter.
However, despite their heightened optimism, executives remained cautious in their 12-month forecasts for revenue growth and new hiring. Many firms also cited concerns about weak market demand and their company's profitability, the survey showed.
Only 26% of those surveyed described the economy as growing, while 54% said it remained stagnant and 20% said it is declining. The executives set their average 12-month revenue growth target at 7.1%, the same as in the first quarter, the survey showed.
Executives polled see five main barriers to their companies' growth over the next year: weak market demand, decreasing profitability, legislative and regulatory pressures, capital constraints and competition from foreign markets.
"Weak demand continues to temper executives' optimism. While they have faith that better times are ahead, executives are looking for a sign - like a boost in consumer spending prompted by lower federal tax withholding - that growth has returned," Brown said.
PricewaterhouseCoopers is the world's largest professional services organization. Its quarterly Management Barometer survey is developed and compiled with assistance from BSI Global Research, Inc.
-By Deborah Lagomarsino, Dow Jones Newswires;202-862-9255;
deborah.lagomarsino@dowjones.com
Updated August 8, 2003 7:32 a.m.
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