Business leaders remain bullish about their businesses on several levels for 2020, including overall profitability. But they also have a real fear of a possible economic slowdown. Those are a pair of key findings from EisnerAmper LLP’s executive survey, which gauged the outlook of hundreds of business leaders throughout the Northeast and South Florida regions.
A total of 76 percent of respondents say their businesses will be “just as” or “even more” profitable in 2020 than they were in 2019—with the single largest category being 55 percent who indicated “more.” Only 9 percent, the lowest amount, feel their businesses will be less profitable. In each of the geographic locations surveyed, the second largest response across the board for 2020 was “equally profitable.”
Respondents’ biggest concern for 2020 is an “economic slowdown,” at 54 percent. Included among the list of biggest concerns is talent/hiring (12 percent), the often-publicized issue of cybersecurity (10 percent), taxes/regulations (9 percent), succession planning (6 percent), and other (9 percent).
With the global economy undergoing trade wars and increasing protectionism, Summit attendees were asked how confident they are in securing goods and services from abroad. Despite the current geopolitical landscape, 42 percent responded “somewhat” or “very” confident of access to overseas goods and services. Only 19 percent indicated “less” or “not at all” confident. The largest single number was 39 percent who said that overseas sourcing does not apply to their businesses.
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When asked about their expectations of employee compensation for 2020 as a percentage of budgets, a majority of 58 percent answered it will increase “strongly” or “moderately” over 2019 levels.
Only 3 percent said it will decline “moderately” or “strongly.” A significant number, 39 percent, feels it will stay the same.
While there has been much written about AI’s potential impact on staffing—some predicting it will result in mass downsizings, with others believing it will lead to the reassignment of staff to higher-level consultative duties as well as create the need for additional IT personnel, the data seems to favor the later. A total of 20 percent of respondents indicated AI will increase hiring levels for 2020, which was almost twice as many as those who said AI will lead to decreased hiring, 12 percent. The majority, 42 percent, however, indicated it is too soon to tell. Geographically, only Long Island individuals feel that AI will impact hiring for the worse—with nearly three times as many saying it will lead to decreased hiring as opposed to increased hiring.
“This year’s survey shows that, while business leaders recognize the risk of potential economic headwinds, the mood is overwhelmingly positive, and companies believe they are well-positioned to grow,” said EisnerAmper CEO Charles Weinstein. “However, given the concerns of a potential slowdown, it is critical that companies plan methodically and comprehensively for an uncertain year. Well-capitalized and thoughtful organizations will want to be nimble and take a strategic approach with respect to both opportunities and challenges.”
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