Quarterly highlights from the Management Barometer survey show that, in the face of sagging expectations for the US economy, senior executives of US-based multinationals lowered their own-company revenue forecasts from an average of 7.0 percent the prior quarter to 5.4 percent. Concern about oil/energy prices and future market demand were reported as the chief barriers to growth. Those most vulnerable to the costs of oil/energy have the lowest expectations for growth compared to others surveyed.

Key findings include:

Optimism about the US economy plunged

More senior executives are now pessimistic than optimistic about the 12-month outlook for the US economy. The number of senior executives who said they are optimistic was 23 percent, off 13 points from the prior quarter and 40 points below last year’s 63 percent. Twenty-nine percent said they are pessimistic and nearly half (48 percent) reported uncertainty.

The chief barriers to growth in the year ahead are anxiety about $100-a-barrel oil prices and lower market demand. Concern also rose in two other areas this quarter – monetary exchange rates and competition from foreign markets.

The majority remain optimistic about the world economy

Fifty-three percent of companies say they are optimistic about the 12-month outlook for the world economy. The same number increased international sales in 4Q 2007. Looking ahead over the next 12 months, the contribution of international sales to total revenue is expected to be 26 percent for those marketing abroad, slightly below the prior quarter’s 28 percent, but ahead of last year’s 22 percent.

Plans to add employees over the next 12 months fell slightly

Forty percent plan to add new workers, a dip from the 46 percent last quarter but the same number as last year. Only 14 percent project workforce reductions and 46 percent say their workforce will stay about the same. Average net workforce projections for the year ahead dropped from flat to minus 0.8 percent; a year ago, it was higher, plus 0.8 percent.

Investment plans remain steady

Forty-eight percent of surveyed companies are planning major new investments of capital, in line with the prior quarter, but below last year’s 56 percent. Leading categories for increased spending are information technology (51 percent) and new product and service introductions (45 percent). Fewer are planning M&A or related activity, off this quarter 6 points from 45 percent to 39 percent.

Gross margins continue to shrink

Costs were higher for 55 percent of surveyed companies and lower for 10 percent, a net 45 percent with higher costs. Prices increased for 41 percent of surveyed companies and decreased for 9 percent, a net 32 percent with higher prices. As a result, gross margins increased for 26 percent of surveyedcompanies, but decreased for 30 percent, a net of 4 percent with lower gross margins. Note that many more companies in the oil/energy-vulnerable segment had higher costs (72 percent) and higher prices (54 percent). A net 7 percent of these companies reported lower gross margins.

Own-company revenue projections dropped

The average 12-month revenue projection fell from 7.0 percent last quarter to 5.4 percent. A year ago, the average revenue projection was notably higher at 7.8 percent. The segment of companies who say they are vulnerable to oil/energy prices project an average revenue growth rate of 4.5 percent versus 6.5 percent for their non-vulnerable peers.

For a complete look at the key indicators for the business outlook, download the full Management Barometer 4Q 2007 Business Outlook report.

About this survey:

One hundred and twenty-nine executives participated in this survey by telephone between November 5, 2007 and January 25, 2008.

Demographic profile:

--Number of participants	129
--Average # employees	8,090
--Average revenues	$3.24B
--Enterprise revenues	$10.51B
--Market capitalization	$11.87B