Private companies' optimism about the global economy is translating into plans for major capital spending projects and increased headcount over the next year, according to a new survey.
PwC US's quarterly Trendsetter Barometer, released Tuesday, found that 59% chief executives and chief financial officers at privately held companies was upbeat about U.S. economic prospects for the next 12 months.
Moreover, 92% of private companies that sell abroad believed that the world economy was either growing or staying the same.
Only 8% of these companies — the lowest percentage in years, PwC said in a statement — described the global economy as slowing.
"Private businesses see resilience in the economic recovery, both at home and globally," Rich Stovsky, U.S. leader of PwC's private company services practice, said.
"This confidence is evident in the survey respondents' strong revenue growth projections, which they put at over 8% for the next 12 months, with more than one-third of them expecting double-digit growth during that period."
The new survey incorporated the views of leaders at 118 product sector and 87 service sector companies, averaging $355 million in revenue/sales, and including $500 million-plus companies.
Capital Spending Climbs
Private-company respondents said they planned to invest an average of 8.4% of their sales in capital projects over the next 12 months. Just once in the past several years had there been such a high a level of spending commitment — 10% in the third quarter of last year — PwC said.
"During the economic downturn, we saw opportunistic companies invest strategically in capital projects to gain a competitive edge and spur faster growth," Ken Esch, a partner in PwC's private company services practice, said.
"Now that the economy has stabilized, many of their peers are playing catch-up, investing in deferred maintenance, infrastructure upgrades, and emerging technologies to enhance their own growth."
