Investors may be gloomy about an economic recovery, but senior executives remain confident in U.S. corporate growth.
According to a survey by
The Ernst & Young Growth Company Leadership survey indicated that 75% of senior executives are optimistic about achieving their companies’ growth expectations over the next two years. Sixty four percent expect their revenues to increase over the next year by an average of 11.3%, while 58% anticipate profit increases this year. Meanwhile, 73% are optimistic that the current economic recovery will continue to expand.
“Growth companies are regaining confidence that they can deliver on their potential and their promise to investors,” said Maria Pinelli, Americas Director, Strategic Growth Markets, Ernst & Young LLP. “Their beliefs about hitting strong numbers are great news and a potential bellwether for the markets and the economy as a whole.”
Yet, according to the
So while senior executives are optimistic, investors are pessimistic, signaling a gap between expectations and reality that could drag down company’s stocks.
Fifty five percent of all respondents say the domestic portion of their business will drive revenue growth, while 39% said a combination of domestic and international operations.
Last month,
According to the Ernst & Young survey, the industries that expect growth in both revenue and profits, are technology, financial services and retail/wholesale.
Job Outlook
The good news is that 40% of executives surveyed anticipate an increase in hiring new employees over the next year, while only 22% anticipate a decrease.
“Job growth – not just maintenance – represents a turning point from the past 12 months,” Pinelli said. “The largest of these growth companies – over $1 billion in revenue – are even more positive, with 46% projecting hiring increases. With so many companies looking to hire, we foresee a substantial contribution to the overall economy. Growth companies and entrepreneurs could represent significant engines to push jobs in the right direction.”
Meanwhile, six in ten respondents said they are spending in the current economic environment in order to realize growth in their businesses. Respondents expect five key investments to increase: technology, employee training, risk management, green initiatives, and research & development.