It's been the chatter on Wall Street for months. Not much hiring until after the November elections. Now that sentiment is being reflected in the latest NYSE Euronext CEO Report released today.
According to the study, a majority of some 340 CEOs from global corporations and U.S. small business owners indicate that a lack of confidence in the near-term outlook has them looking to 2013 and beyond for improvements in the economy, business and job creation.
The 2012 NYSE Euronext CEO Report, which is now in its eighth year, also presents the views of business leaders on the health of small businesses in America and the impact of the upcoming U.S. election on business and economic growth, employment, the deficit and taxe, and public policy. Among its more important findings:
- Two-thirds of public-company CEOs and nearly 60 percent of U.S. small business owners project modest growth for the global economy beginning in 2013.
- 64 percent of public companies intend to add jobs in 2013, almost twice the rate of U.S. small businesses, many of which do not expect growth or new jobs this year or next.
- Lack of access to capital is prohibiting growth, innovation and new jobs, especially for small business in America.
- Ahead of the U.S. election, the majority of respondents say reductions in taxes, deficit, regulation and entitlements will stimulate the economy and job growth.
Results of presidential election expected to impact the world, the U.S. economy and job creation
- 86 percent of public-company CEOs and 87 percent of U.S. small business owners say the election will have an impact on the U.S. economy; 79 percent of both groups expect an impact on job creation; and 64 percent and 67 percent, respectively, expect an impact on the global economy.
- Asked what guidance they would offer the next U.S. President and Congress, CEOs and U.S. small business owners focus on reducing regulation and the size of government and reducing or keeping corporate taxes low.
- Select CEO comments:
- “Cut taxes and develop globally competitive, comprehensive corporate and individual tax reform (to) unleash a flood of available capital for deployment into the economy.”
- “Reduce debt and the deficit, compliance and regulatory costs, and entitlements over the long term.”
- “Invest in people, in education, in innovation.”
- Select U.S. small business owner comments:
- “Create a stable environment where it is easier to predict future employment costs and other business taxes.”
- “Provide matching investment tax incentives of up to 50 percent to early stage investors who invest in qualified new businesses certified by each state.”
- “Easier and greater access to capital, including loans for SME.”
Global economy views remain bleak in 2012, but longer-term outlook is positive
- 48 percent of respondents rate the global economy as “poor” and 48 percent say it is “fair.”
- 67 percent of public-company CEOs and 59 percent of U.S. small business owners surveyed expect the global economy to grow in 2013.
- Nearly 80 percent of global CEOs believe the U.S. economy will grow slowly or moderately in 2013, while 60 percent of small business owners and entrepreneurs agree.
- 17 percent of CEOs believe the Eurozone will experience economic growth in 2013.
- China is expected to have the greatest growth in 2013, says 39 percent of CEOs and 34 percent of U.S. small business owners; Brazil is next at 15 percent and 14 percent, respectively.
Business growth expected to accelerate in 2013 and beyond
- Nearly 75 percent of CEOs and nearly 60 percent of U.S. small business owners believe their company will experience growth in 2013.
- Many companies and U.S. small businesses are having significant trouble raising capital.
- 43 percent of CEOs say their need for capital is fully met, and 20 percent admit they do not have enough capital.
- 21 percent of U.S. small business owners have sufficient capital while 47 percent indicate their capital needs are marginally or not met at all.
- U.S. small businesses owners and entrepreneurs are most likely to use their own personal savings to fund growth with loans from financial institutions and credit cards as secondary sources.
- Beginning in 2013, 92 percent of CEOs and 74 percent of U.S. small business owners are optimistic for their companies’ growth prospects over the next three years.
- Young U.S. start-ups with annual revenues below $1 million expect significant growth during this period.
- 29 percent of CEOs and 41 percent of U.S. small business owners rate the current environment for start-up businesses as favorable.
Job creation is primarily the responsibility of the private sector
- More than two-thirds of CEOs say job creation is primarily the private sector’s responsibility, a view shared by half of U.S. small business owners.
- Most respondents agree that cutting business tax rates is the most effective way to accelerate the growth of permanent jobs.
- U.S. small business owners favor increasing funding for programs targeted for emerging enterprises and tax credits for hiring workers.
- Nearly two-thirds of CEOs plan to add to their workforce in 2013.
- One-third of U.S. small business owners plan to add to their workforce in 2013.
- More than half of CEOs and U.S. small business owners see most new jobs in the private sector coming from small businesses and new enterprises over the next three years.
- Approximately 25 percent of listed CEOs say their company currently has a program in place to connect their business with start-up, early stage or small businesses.
- There is significant interest among both listed CEOs and U.S. small business entrepreneurs in a Web tool which would allow large and small businesses to connect.
The survey was conducted in July by ORC International and reflects the thoughts of 340 CEOs from companies listed on NYSE Euronext markets from 26 countries and 285 U.S. small business owners. Complete results of the report are available at: www.nysemagazine.com/CEOreport.