Trendsetter Barometer® Q4 2016 - Private companies start 2017 with an optimism surge.
No one wants uncertainty. And so private companies, like the stock market, greeted the end of the election season with relief, to put it mildly. Private companies’ optimism in the US economy spiked in the final weeks of 2016. Their revenue projections, however, did not have a similarly dramatic uptick. And concern over every headwind our survey asks about — including legislative pressures, increased taxation, and squeezed profitability — actually rose; a uniformity of movement we rarely see.
To deal with these headwinds, companies are taking cautious measures. Nearly all of them are prioritizing cost-cutting in 2017, as well as greater workforce productivity. And they plan to scale back raises, too, though more companies do say they’ll hire. Which is probably a good idea, since new products and services are a big priority for Trendsetter businesses this year, and you can’t do innovative R&D without the right talent on board.
During the fourth quarter, private firms remained committed to international markets. Though, in the future they may find it harder to do business abroad as Brexit moves forward and Washington possibly unravels trade agreements. Trendsetter companies also plan to keep up capital expenditures and increase operational spending. The number of firms planning the latter is at a post-recession high.