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Companies Plan Healthy Increases in New Hiring, IT Spending March 10, 2005 (SmartPros) Senior executives of large, U.S. multinational companies predict revenue growth for the next 12 months will continue to be strong, though slightly lower than in 2004. Executives expect big increases in new hiring and IT investments, and are more confident of their ability to deal with legislative and regulatory pressures, competition from overseas markets, decreasing profitability, and weak market demand. According to PricewaterhouseCoopers Management Barometer survey, senior executives expect 9.6 percent revenue growth, on average, for the next 12 months, below the 10.1 percent achieved in 2004. "After a year of double-digit revenue growth, executives at our largest companies believe prospects are good for continued expansion," said John O'Connor, vice-chairman of PricewaterhouseCoopers LLP. "The percentage of companies expecting to add new jobs is the highest since 2001, and a strong indicator for sustained growth." Fifty-seven percent of surveyed companies plan to add to their workforce over the next 12 months, while only 11 percent expect a net reduction, and 32 percent foresee no change. More technology companies, 62 percent, expect to add workers than non-tech businesses, 55 percent, although non-tech companies plan a greater average increase to their workforce. Companies planning new hiring expect to grow revenues at a 10.8 percent rate over the next 12 months, compared to only 6.0 percent for other companies. Areas targeted for new hiring include: professionals and technicians, cited by 36 percent of those planning to add jobs, sales and marketing, 23 percent; white collar support, 21 percent; production workers, 19 percent; and skilled workers, seven percent. Twenty-six percent of executives noted concern about oil/energy prices. Areas of greater concern this quarter over last quarter included lack of qualified workers, monetary exchange rate and pressure for increased wages. Fewer surveyed executives than last year voiced concern about key barriers such as regulatory pressures, decreasing profitiability, taxation policies and competition from foreign markets. "Business leaders appear more confident now about dealing with issues like regulatory compliance and competition from overseas markets," said O'Connor. "But fluctuating energy prices are emerging as a concern for U.S. businesses and bear careful monitoring." PricewaterhouseCoopers' "Management Barometer" is an established quarterly survey in the U.S. The surveys are developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc.
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