New York (Aug. 17, 2004) -- Despite some concerns about the economy, the chief executives of the nation’s fastest-growing companies increased their companies' revenue growth targets, along with plans for new jobs and major new investments in the second quarter, to the highest levels since the fourth quarter of 2000, according to a survey by PricewaterhouseCoopers.

Some 76 percent of CEOs surveyed are optimistic about the economy over the next 12 months, off from 81 percent in the prior quarter, while 53 percent remain concerned about weak market demand as a possible roadblock to growth in the year ahead, according to PwCs’ second quarter survey of 364 CEOs of privately held product and service companies with revenues/sales of $5 million to $150 million.

Despite their concerns, CEOs retained or upped several of their company’s key metrics for the next 12 months. Ninety-three percent continue to expect positive growth for their business. Revenue growth targets were adjusted upward to 21 percent, on average, from the prior quarter’s estimate of 20.2 percent.

In addition, 78 percent are planning for workforce growth, up from 76 percent, with net new hires averaging 11.9 percent, up from first quarter estimates of 8.1 percent. Companies planning to add workers expect an average revenue gain of 24.4 percent over the next 12 months, versus 8.8 percent for those standing pat. Nearly half (45 percent) are planning major new corporate investments, up from 42 percent, with spending to average 11.1 percent of revenues, consistent with the prior quarter’s projected 11.4 percent. Companies planning to make new investments expect revenue growth of 26.6 percent over the next 12 months, compared to 16.5 percent for non-investors, PwC reported.

Most budget increases are expected in four areas: information technology (planned by 48 percent), new product development (41 percent), sales promotion (36 percent), and advertising (31 percent). The percentage of companies planning increased budgets for IT is the highest in more than two years, noted Paul Weaver, PwC global technology industry leader.

Over the next 12 months, surveyed companies expect 9 percent of revenues from Internet-related sales, including 3.7 percent from direct sales and 5.3 percent from indirect sales, compared with 5.8 percent of revenues a year ago -- 2.5 percent of direct and 3.3 percent of indirect sales.

-- WebCPA staff

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