When financial services leaders are no longer confident, where does that leave the rest of us?
That’s the question we are left to ponder after reading Grant Thornton LLP’s most recent Business Optimism Index, a quarterly survey of U.S. financial services leaders, which reveals that U.S. financial services leaders are lowering their expectations of the US economy. The survey found that 61% of respondents believe the US economy will improve in the next six months, down from 72% three months earlier. Meanwhile, 8% believe the US economy will get worse, an increase from 3% during the last survey.
At the same time, 58% don’t think Dodd Frank will improve accountability and transparency in U.S. financial system.
“The financial services industry in particular is facing unprecedented change. As we approach the one-year anniversary of Dodd-Frank, firms are still trying to get a handle on how they are going to meet the increased compliance burden while still executing their plans for growth,” says Nichole Jordan, Grant Thornton LLP National Banking and Securities Industry Leader, in a press release. “However, the silver lining in this index is that financial services firms are more optimistic about their own business prospects—we’ve seen that firms are focusing on organic growth and mergers as ways to get ahead in the current environment.”
The good news is that 92% responded that they are very or somewhat optimistic about their own business, compared to 85% who answered favorably in the previous survey. Only 8% are very or somewhat pessimistic about their business, while 15% were pessimistic in the previous survey. Forty-four percent said they plan to increase staff, almost the same percentage as three months before when 45% said they planned to increase staff. But fewer said they would decrease staff, which is a positive sign.
The survey was conducted May 19-June 3, 2011 by an outside polling organization, with a total of 377 senior executives from various industries, of which 76 were from the financial services industry, defined as U.S. banking, investment banking, brokerage and securities companies.