Large Multinationals Poised for Turnaround, Survey Finds
Optimism about prospects for the U.S. economy rebounded among those surveyed during the fourth quarter of 2001, with 47% saying they are optimistic, up from 23% in the previous quarter. Seventeen percent said they are pessimistic, compared to 35% in the third quarter of 2001. The remaining 36% are uncertain.
“We may have seen the turning point in the recession in the fourth quarter of 2001, with optimism on the upswing and executives predicting expansion,” said Frank Brown, global leader for Assurance and Business Advisory Services for PricewaterhouseCoopers. “Companies have had the benefit of added time to assess the impact of the recession and the trauma of September 11, and are sending signals that the rebound has begun. If these indicators continue in the first quarter of this year, we can expect 2002 to be a year of healing and moderate growth.”
Overall, 39% of surveyed executives said their companies are planning major new investments over the next 12 months, comparable to 38% in the previous quarter. This level is consistent across industries, including 37% of technology companies. The magnitude of planned investments, however, jumped to 9.9% of revenues, from 7.8% in the previous quarter. Companies planning major new investments are expecting revenue growth of 9.0% in the year ahead, 50% above the average.
“Capital spending plans call for a substantial increase in absolute dollars, and that’s good news for the economy,” Brown said. “An increase in capital spending will help prospects for the ailing technology sector and its suppliers.”
PricewaterhouseCoopers’ new “Management Barometer” is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc. PricewaterhouseCoopers (www.pwcglobal.com) is the world’s largest professional services organization.