|By PR Newswire||
|January 9, 2013 03:07 PM EST||
SAN DIEGO, Jan. 9, 2013 /PRNewswire/ -- The Vistage CEO Confidence Index was 87.0 in the 4th quarter of 2012, down from 89.0 in the 3rd quarter and lower than the 98.8 index posted in 4th quarter of 2011. CEOs reported a continued slowdown in the pace of economic growth and anticipated overall economic conditions would remain subdued in the first half of 2013. Economic and political uncertainty was voiced by nearly half of all CEOs when asked to identify the most significant business issue they are now facing. At least one-in-four firms reported that concerns about the fiscal cliff and Washington's continued gridlock had already caused them to reduce their investments and number of new hires. The survey was conducted between December 10th and December 19th, 2012 and included 1,601 respondents throughout the U.S.
To view the multimedia assets associated with this release, please click: http://multivu.prnewswire.com/mnr/vistage/51160/
Despite the avoidance of the fiscal cliff, Vistage CEOs may continue to foresee a slow pace of growth in 2013 because of the ongoing uncertainty about the impact on our economy of raised taxes on higher-income earners and of expected continued regulatory burdens, as well as the still-looming concerns about the federal deficit and debt ratings.
Commenting on the results, Vistage CEO Rafael Pastor stated: "The inability of Washington's political leaders to work together will only fuel continued uncertainty. Yet again, small business leaders are left to wonder if they'll receive any longer-term certainty from the President and the Congress about the key factors that help drive increased consumer spending, investment, productivity, and job growth."
Uncertainty Slows Economic Growth. Current economic conditions rebounded from the midyear lull, as twice as many firms reported recent gains as losses. Nonetheless, just 35% of firms at yearend reported improving conditions, down from 60% at the start of 2012. Overall, 30% expected a weaker economy in 2013 compared with 26% who expected stronger economic growth. The main issue hampering stronger growth is the political and economic uncertainty caused by the ongoing saga in Washington.
Cautious Hiring Plans. Planned payroll additions fell to 45% in the 4th quarter 2012, down from 49% in the 3rd quarter and 55% in last year's 4th quarter survey. Most of the shift has been toward keeping the number of employees unchanged as just 11% expected to reduce their staffs. While the proximate cause is an anticipated slowdown in revenue growth, uncertainty about federal tax and spending policies has been the central cause for lower growth prospects.
Investment Plans Weaken. Planned investments in new plant and equipment declined, with the percent that planned to reduce spending rising to 20% in the 4th quarter, up from 15% in the prior quarter and the highest level since mid 2009. Not only did 32% report cutting their spending due to the looming fiscal cliff, but 22% would cancel ongoing investments if no resolution was reached by the end of February.
Revenue and Profit Slowdown. Two-thirds of all firms anticipated revenue growth during the year ahead in the 4th quarter survey, although only slightly below the prior two quarters, it was down 10 percentage points from last year. Profits were anticipated to increase by 49% of all firms, down from 52% last quarter and 55% last year. Just 39% expected to increase the prices for their products or services. Managing costs and expanding the number of customers they serve were seen as the biggest challenge during the year ahead by 47% of all firms.
about the Vistage CEO Confidence Index
The Vistage CEO Confidence Index, established in 2003, is a quarterly survey of small- to mid-sized business CEOs about the U.S. economy. The Q4 2012 Vistage CEO Confidence Index includes responses from 1,601 U.S. CEOs, surveyed between December 10 and December 19, 2012, with a margin of error of 1.6 percentage points. Since its establishment in 2003, the Index has proven to be a reliable harbinger for changes in GDP and Employment, two to three quarters hence.
about Vistage International
Founded in 1957, Vistage International, Inc., headquartered in San Diego, California, is the world's leading CEO peer advisory membership organization, serving more than 16,000 CEOs and senior level executives in 15 countries. Vistage members participate in monthly Chair-led peer advisory group meetings, receive one-to-one coaching, learn from expert speakers, and interact among a global network of business leaders from a broad range of industries.
SOURCE Vistage International
- "All It Took Was One E-Mail to Larry," Says Former eBay Research Director As He Moves to Google
- Google Ramps Up Its Mobile Reach: Launches "Mobile Web Search"
- Ericsson + Napster = World's First "Wireless Digital Music" Brand
- VoIP Update: Yahoo! Buys DialPad
- Free Guest Passes for the SOA World Conference & Expo in NYC
- SYS-CON i-Technology Podcast August 30, 2005
- A Flair for Food - Health-Conscious Cooking Is This Chef's Cup Of Tea
- Sony PSP May Feature Porn
- Kapow Helps Seiko UK, Provides SMS Text-Alert Services
- South Korea is World's Largest Phisher