In this recovering economy, mid-market companies are trying to grow revenue, boost productivity and stay competitive. While the executives at the helm remain optimistic about the future, they believe government is hindering their economic growth, according to Deloitte’s report, “Mid-market Perspectives: 2013 Report on America’s Economic Engine.”
The majority of respondents in the nationwide survey - 57 percent - anticipate that over the next year, the economy will grow less than 2 percent or not at all.
For 69 percent of respondents, government budget challenges are the biggest concern; 60 percent cited rising health care costs and 53 percent cited high tax rates. All three issues were perceived to be greater obstacles this year than they were last year.
“This year’s results highlight a potential economic inflection point, with most mid-market executives confident about their business prospects and taking the necessary steps to prepare for growth,” said Tom McGee, national managing partner of Deloitte Growth Enterprise Services. “In order for the economy to regain its momentum and allow businesses to fully prosper, the survey respondents want government to make meaningful progress on the issues that are creating uncertainty and hindering economic growth.”
The Deloitte survey, conducted by OnResearch, polled 525 senior executives at companies with annual revenues between $50 million and $1 billion about their expectations, experiences and plans for becoming more competitive in the current economic environment. Twenty-two New Jersey firms were included, though those firms were not named.
“What I’ve seen when talking to New Jersey-based companies is that they primarily cite the challenges with government policies, particularly around the budget,” said Ron Rickles, managing partner of Deloitte’s New Jersey practice.
The survey was conducted in the latter half of March, so the fiscal cliff and sequestration were likely in the minds of the executives who took part in the survey, Rickles said.
“If we can get more stability around that, the level of confidence might go up,” he said. “There is positive economic activity but it’s very limited right now.”
The findings showed that the housing market and European debt were much less of a concern than they were last year. Many companies are poised to grow, with 46 percent expecting to increase revenue this year. Still, due to the uncertain business climate, 43 percent of mid-market executives will defer major investments, although 46 percent ranked investment in technology as a priority.