Despite forecasted average sales growth of 23 percent for the next year, a survey of chief executives from the nation’s largest companies showed CEOs are reluctant about expanding their payrolls.
The survey by PricewaterhouseCoopers found that while 78 percent plan to hire new employees in the next year, of those expanding, the average increase of staff was only 8.7 percent. That was down from the prior quarter, when the estimate was 9.9 percent by those planning new hires.
“These CEOs are managing for profitable growth by keeping a tight rein on their labor costs,” said Richard Kalenka, managing partner for PWC’s San Diego office.
PricewaterhouseCoopers contacted 350 CEOs from fast-growing private companies ranging from $5 million to $150 million in sales. The survey also found 47 percent who expect to make major new investments in their businesses during the next 12 months, up from 41 percent in the prior quarter. The planned investment also rose to 14.6 percent of revenues, up from 12 percent of revenues in the prior quarter.
The most often mentioned reason of the new investment was for information technology, new product development and sales promotion.
Optimism still prevails among the CEOs responding to the survey, but it’s declining. Asked about prospects for the domestic economy, 72 percent said they were optimistic, but that was down from 80 percent who counted themselves as such in the prior quarter. Twenty-two percent said they were uncertain, and 6 percent were pessimistic.