According to CEO peer-advisory organization Vistage, CEOs foresee an improved economy and better prospects for their companies despite sequester cuts and tax increases. In its Q1 2013 Vistage CEO Confidence Index, the confidence index was found to have risen from 87 during Q4 2012 to 96.6 in Q1 2013. As the economy slowly improves, CEOs are becoming more certain about how to control costs, grow revenue, and properly staff their firms.
About 12.5 percent of polled firms reported that the effects of the recent sequester will adversely affect their businesses, and few CEOs expect a fiscal resolution any time in the near future. About 80 percent of firms expect a continued uncertainty about future federal policies though most firms are learning how to cope with this uncertainty, made easier by an expanding economy. Nearly half of polled companies reported improved economic conditions in Q1 2013, up from 27 percent in Q2 2012.
More than one-third (36 percent) expect the economy to continue to improve throughout the year and are cautiously optimistic about the economy over the next year. Net hiring plans also improved after having fallen for three prior consecutive quarters. Over half (52 percent) of firms anticipate adding to their payrolls during Q1 2013 while just 8 percent expect to reduce their staffs at some point during the year. Three-quarters of CEOs continue to have difficulty finding qualified employees and 20 percent still rank finding proper talent as the most important issue facing their organizations.
Overall, two-thirds of firms expect a growth in revenues over 2013 while nearly 60 percent anticipate flat prices for the products and services they offer. Profits are expected to increase by 53 percent of firms though about 25 percent of firms reported that their biggest challenge for the year is managing costs. Another 25 percent said maintaining and adding to their customer base will be the biggest challenge.