Company leaders could seek out more investment loans in the coming months, as many expect business to increase and spending to jump. Business Roundtable's CEO Economic Outlook Survey for the first quarter of 2013 revealed many executives have high expectations for the market over the next six months, as they anticipate increased sales and more spending.
Data suggests leaders anticipate strong sales, expansion
The survey data showed respondents anticipate 2.1 percent growth in 2013, a small gain over the 2 percent predicted in the previous survey. However, the overall composite index saw a huge increase. The index jumped to 81, compared to 65.6 in the fourth quarter of 2012. This leap puts the index at its highest level since the second quarter of 2012 and suggests business leaders are anticipating significant sales growth and expansion.
Seventy-two percent of respondents forecasted their sales will increase in the coming six months, compared with just 58 percent who said the same late last year. Plenty also plan to increase their business spending, with 38 percent claiming it will increase. However, these strong numbers don't mean companies will be adding to their workforces; only 29 percent of respondents plan to hire new employees soon.
"CEOs foresee somewhat better economic performance for the next six months, with improved expectations for sales and capital expenditures," said Jim McNerney, chairman of Business Roundtable and CEO of The Boeing Company. "The relatively smaller improvement in the outlook for hiring, however, may reflect ongoing uncertainty and a wait-and-see attitude about the business climate in the United States, as agreement on the nation's debt and budgetary issues remains elusive."
Strong business could mean increased need for business financing
As more company leaders gain confidence about the future of their firms, anticipate improved sales and plan on spending more, they could notice a greater need for growth capital to ensure their business plans are on track. CEOs who want to increase spending won't always be able to do so without securing loans that will allow them to grow, enhance their product lines or invest in research for new business technology.
Companies seeking project finance in the coming months may struggle obtaining it. In these instances, it may be helpful for business owners to work with small and mid-sized local financial institutions, rather than big banks. Not only can smaller operations provide businesses with more loan access, they can also offer unique cash management solutions for entrepreneurs.