US business leaders are the most optimistic they’ve been since before The Great Recession, according to Chicago-based Grant Thornton LLP’s most recent Business Optimism Index. Nearly two-thirds (64%) believe the domestic economy will improve in the next six months, compared with 47% back in November 2010. Half of the business leaders (49%) say their company plans to increase staff in the next six months (up from 43%), while only 10% plan to decrease staff (down from 15%) The Index itself is up 6.7 points to 69.7, the highest it’s been since 2004.
Nearly nine in 10 of the business leaders (87%) are also optimistic about their own businesses, with only 13% saying they’re pessimistic about their companies’ growth over the next six months.
As an aside, regarding reducing the US government budget deficit, business leaders favor cutting spending 3:1 [surprise, surprise] over raising taxes. (See chart below).
The survey was conducted last month, with 377 senior executives from various industries across the country responding.
My Thoughts: I’m seeing lots of good news out there that also points to better times ahead. The 2008-09 steady stream of plant closings and consolidations has dried up; attendance at association meetings, conferences and printing-related tradeshows is on the rise again; and the list of capital-equipment investment and packaging-M&A announcements is returning to pre-recession activity.
But on the downside (I am “The Converting Curmudgeon,” after all), there are some sticking points that could spell trouble. 1) Manufacturing price increases are expected to be double the 3% Consumer Price Index that’s forecasted for 2011. Raw-material suppliers are already jacking up prices for converters for just about every category of consumable and substrate. 2) Crude oil is expected to remain above $100 a barrel through 2012. So, consequently, basic plastic resins are going to cost more as well. And 3) As business does improve, employees will feel emboldened to seek higher wages, especially after three years of just being glad to have a job.
|OVERALL Business Optimism Index||58.8||67.6||58.4||63.0||69.7|
|Believe US economy will improve||43%||63%||34%||47%||64%|
|Believe US economy will get worse||12%||6%||16%||10%||4%|
|Very or somewhat optimistic about own business||74%||87%||76%||79%||87%|
|Very or somewhat pessimistic about own business||27%||13%||24%||21%||13%|
|Plan to increase staff||31%||44%||38%||43%||49%|
|Plan to decrease staff||18%||12%||15%||15%||10%|
|To reduce US government budget deficits…|
|Spending should be cut||77%|
|Taxes should be increased||23%|