New York (July 27, 2004) -- While nearly three-quarters of chief executives surveyed expect the current economic upturn to have staying power, the majority are still proceeding with caution, according to PricewaterhouseCoopers.
While 73 percent of CEOs polled expect the upturn to last two to three years or longer, two-thirds are taking a short-term approach, managing with a business planning cycle of one year or less. One in four CEOs view the upturn as a phenomenon of a year or less. Only 33 percent are operating from a plan covering the next two to three years, according to PwC, which interviewed the CEOs of 392 privately held product and service companies identified as the fastest growing U.S. businesses over the last five years.
The business owners polled expect that the two greatest new risks to their businesses over the next 12 to 24 months will involve their success in hiring additional permanent, full-time employees (82 percent) and increasing their investments in training (72 percent). Other risks included getting better terms from suppliers (49 percent), seeking new suppliers (48 percent) and making more major capital investments (42 percent).
Going forward, more CEOs are concerned about business and strategic risks than operational ones. Most CEOs (83 percent) are concerned about at least one major business or strategic risk in today’s growing economy, including 43 percent whose greatest concern is an economic downturn. Other major risks mentioned most often include retaining or attracting key employees, cited by 37 percent; and delivering quality customer service, cited by 28 percent. Only 13 percent see the return of inflation as a major risk.
Despite their cautious approach, most CEOs say that their company’s ability to meet its primary business objectives over the next 12 to 24 months is “excellent” (39 percent) or “good” (50 percent), while 11 percent see their prospects as “fair.”
-- WebCPA staff
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