Top executives at private companies are dramatically more concerned than they were a year ago about a potential lack of demand for their products and services.

Almost half (45%) of the 300 CEOs and 300 CFOs surveyed by PricewaterhouseCoopers during the first quarter cited the issue as a top threat to business growth. That was 28 percentage points higher than the proportion of executives who held that view in the opening quarter of 2018.

Panelists in PwC’s quarterly survey of private-company executives reported a softening revenue forecast. On average they expected revenue growth of 6.6% over the following 12 months, down from 7.6% in the fourth-quarter 2018 survey.

Particular concern was registered by companies with international sales.

PwC calculates executives’ sentiments on various topics as the proportion of executives who say they are “optimistic” minus those who say they are “pessimistic.” For international sales, first-quarter sentiment was -18%, a steep decline from -4% in the final quarter of 2018.

Satisfactory resolutions to the U.S.-China trade dispute, the U.K.’s impending exit from the European Union, and U.S. immigration reform are at the top of the executives’ wish lists, says Ken Esch, a partner in PwC’s private company services practice.

Workforce concerns also rank highly. “Global uncertainties and skills shortages are clearly major factors for expansion forecasting,” Esch says.

As to the skills shortage, 64% of the panelists identified it as a concern. That means retaining existing staff is a higher priority than ever. The surveyed executives said in the first quarter that they were budgeting for an average 4.5% wage increase for their current workforce over the following 12 months. That was up slightly from 4.4% in late 2018.

Meanwhile, despite the concerns for the global economy, panelists overall remained optimistic about the U.S. economy. The net sentiment regarding the domestic economic outlook was 65%, up from 63% in the prior quarter.

Underscoring that optimism, the survey found that 82% of the panelists expect their companies to increase their operating budgets in the next 12 months.

But the private companies represented on the panel aren’t limiting their growth vision to one year out. “The businesses we survey are taking a longer-term view of their future,” says Esch. “Many plan and invest for the next few years and decades, rather than quarters.”

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