Business executives throughout the Tri-State area are cautiously optimistic that their companies, as well as the general business climate, are both headed in the right direction, according to a new survey conducted by the accounting and business consulting firm Margolin, Winer & Evens.
Many are putting their money where their mouths are — with plans to invest in technology, infrastructure and new products and services in the upcoming year.
The survey polled nearly 500 business executives about the state of their companies and industries, as well as their thoughts on the economic and political landscape.
Fifty-five percent of the respondents are the CEO/owner or top financial executive of their company. Respondents expressed moderate optimism that their companies and the general business climate were improving. Nearly all said they anticipated an upcoming year of either modest growth (41%) or (at worst) flat revenue (49%).
Many also indicated that they are planning new investments in technology (33%), research & development (12%), and operational infrastructure (12%). In addition, 21% of manufacturer/distributors and nearly 10% of executives across industries reported that the financial downturn is no longer impacting their business.
“What these results tell us is that business executives, mired for more than five years in a dismal business climate, are starting to see glimmers of hope for the future – and are proactively working to ensure that their companies’ fortunes rise with the economic tide,” said Teddy Selinger, managing partner of MWE.
“The increased investment in infrastructure and R&D, for instance, show that businesses are confident that they have weathered the worst of the economic storm and are thinking ahead to the future of their companies and industry.”
However, the survey also showed that most respondents (91%) are still feeling the impact of the recession, and in a number of areas. Many anticipate rising costs in the coming year, particularly in the areas of medical and other fringe benefits (20%), energy costs (14%) and payroll (14%).
While few are considering recession-era corrective measures, such as layoffs (only 14%), a significant number of companies (22%) are postponing or reducing significant investments and/or capital expenditures over the next year.
Respondents also showed a clear preference for Mitt Romney, the former Bain Capital CEO whose political platform is seen as more pro-business than President Obama’s in key areas including health care, tax, financial regulatory reform and Social Security reform.
In addition, respondents favored Romney over Obama on the issues of unemployment, consumer confidence and the budget deficit. One caveat: The 51 attorneys who responded to the survey leaned more toward Obama in some of these key areas.
In a generally uncertain political climate, the new Medicaid tax and scheduled expiration of favorable estate tax cuts at the end of 2012 have had surprisingly little impact.
A significant percentage of respondents (40%) indicated that they have not implemented any techniques to offset the estate tax changes, while 65% have either done nothing or are waiting for the outcome of the November elections before they plan to address the tax increases slated for the beginning of 2013.
“What is surprising is that they don’t seem focused on the upcoming tax changes and how it will affect them both personally and in their businesses,” said Lance Christensen, partner in charge of MWE’s Tax Department.
“There are many planning techniques that can be fleshed out in the coming months which can be flexible enough to accommodate any of the eventual outcomes. Waiting until the elections are over puts you behind the 8-ball, forced to make important decisions in too short a window of time to adequately plan.”