Deloitte Survey: Mid-Market Executives Anticipate Growth Yet Continue to Cite Government as Biggest Obstacle
Nearly half of mid-market companies expect revenue growth in next 12 months
New York, April 29, 2013 – After sustained economic turmoil, mid-market executives have a stronger footing and are taking the necessary steps to make the sector an engine for growth in the next year. However, while optimistic about their own growth, according to findings in Deloitte's "Mid-market perspectives: 2013 report on America's economic engine," they have lower expectations for U.S. economic growth. The majority (57 percent) of respondents anticipate that over the next year the economy will grow less than two percent or not at all.
Mid-market executives that responded to the survey believe government budget challenges (69 percent), rising health care costs (60 percent) and high tax rates (53 percent) are the greatest obstacles to U.S. economic growth. These three issues were perceived to be greater obstacles to respondents this year than they were last year.
Interestingly, the housing market and European debt crisis were much less of a concern this year. Only 24 percent of respondents cited the housing market as an obstacle to growth, compared to 59 percent in 2012. Just 31 percent of respondents said the European debt crisis was an economic challenge, compared to 50 percent last year.
"This year's results highlight a potential economic inflection point, with most mid-market executives confident about their business prospects and taking the necessary steps to prepare for growth," said Tom McGee, national managing partner, Deloitte Growth Enterprise Services, Deloitte LLP. "In order for the economy to regain its momentum and allow businesses to fully prosper, the survey respondents want government to make meaningful progress on the issues that are creating uncertainty and hindering economic growth."
Companies have taken significant actions to grow their revenue, boost productivity and increase their competitiveness. As such, mid-market executives are somewhat optimistic about their own businesses. In fact, 46 percent expect to increase revenue this year.
Respondents are most challenged by the gridlock happening in Congress. The survey showed that mid-market executives are concerned with a myriad of issues such as health care costs and budget challenges. Respondents had specific views on the current tax rates.
Companies are operating pragmatically with nearly half (43 percent) of mid-market executives deferring major investments due to the uncertain business climate. Those that are making investments are prioritizing according to their re-adjusted expectations.
We invite you to review our full report, "Mid-market perspectives: 2013 report on America's economic engine."
In March 2013, a Deloitte survey conducted by OnResearch, a market research firm, polled 525 executives at U.S. mid-sized companies about their expectations, experiences and plans for becoming more competitive in the current economic environment. Respondents were limited to senior executives at companies with annual revenues between $50 million and $1 billion.
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