By Rob Starr, Big4.com Content Manager.
Deloitte’s latest report, “America’s Economic Engine: Tapping the brakes,” highlights trends that are true to the title in that it chronicles 29 percent of mid-market executives sharing the belief the U.S. economy will not grow more than 2 percent over the next twelve months. We recently spoke with Roger Nanney, Vice Chairman of Deloitte LLP and National Managing Partner of Deloitte Growth Enterprise Services, about this and other key trends and findings found in the research.
“This Fall marks the five-year anniversary of our survey, and over the year’s executives’ confidence in the economy and company growth have firmed,” he said adding the current installment was the first where respondents displayed some cause for concern. This survey revealed tempered forecasts for a growing economy over the next 24 months. Both rising health care costs (cited by 53% of the executives) and rising interest rates (a concern to 33% of
respondents) were noted as reasons.
Nanney cautions against painting these executives as having a completely negative economic outlook.
The numbers from “America’s Economic Engine: Tapping the brakes” verify this with training (51%) and hiring full-time employees (46%) dominating talent investment strategies for these companies over a 12 month period in spite of the fact they might be focusing on short term market bumps.
Case In Point
Another case in point. Although there is what Nanney calls a “pretty healthy jump” from 20 to 29 percent in the number of executives who felt the GDP rate over the next twelve months would be 2 percent or less, looking at the bigger picture tells the complete story.
“This has been and continues to be a pretty confident group, with two-thirds expected to see growth at two percent or greater,” he says. “Executives are not signaling a hard stop on investments, but instead are exercising caution based on the expectation of a modest pace of growth in the global economy.”
He elaborates on volatility in the market and other usual suspects like heath care as two of the factors that drew the executives’ attention, noting in particular an increase in the concern about the latter. This was a change from previous surveys that had given the indication executives were on top of costs and regulatory requirements.
“In this last survey, healthcare costs moved to number one as a significant obstacle to the continued growth of the U.S. economy,” he said. “When considering future prospects for company growth, healthcare concerns were cited as the number two concern.”