In the first quarter, the Vistage CEO Confidence Index – a measure of economic, market, and industry trends – has dropped four points from 4Q07, hitting a five-year low of 72.0 amid concerns about the economy,?said Vistage International.
The Vistage CEO Confidence Index, 2Q06 to 1Q08:
Below, some of the findings from the survey of CEOs of small-to-midsize companies.
Languishing Profit/Revenue Expectations
Expectations of revenue growth are down 12 percentage points from last year (63% of those surveyed predicted an increase in revenue, compared with 75% in 2006).
Moreover, 13% of business leaders expect revenues to decline, due to rising costs and consumer resistance to price increases.
Of the CEOs surveyed…
- Almost half think the economy has already entered a recession.
- Only 14% expect the economy to improve within a year.
- One in five anticipate declines in 2008 profits.
Tight Credit Foils Investment
Despite the Federal Reserve’s lowered investment rates,
- The majority say it is not any easier for them to borrow money and fund their companies.
- Some 22% plan to decrease their investment spending in the next year.
Attracting, training and retaining qualified employees is the best way to grow businesses, according to the CEOs:
- 47% plan to add to their total number of employees in the next 12 months.
- 83% say they will not cut jobs.
- Still, one in eight see staff cuts as unavoidable.
Marketing Is Key
Increase of marketing efforts was the most frequently identified adjustment to the current or impending recession, more common than saving cash, reducing employees, or selling off products or services.
Nearly 60% of CEOs plan to add new marketing initiatives to expand their target markets.
About the survey: Vistage compiled responses from 2,287 CEOs of small-to-midsize companies surveyed Feb. 11- 20, 2008.