U.S. Finance Executives Lead Global
Expectations for “Substantial” Economic Expansion; North America
Leads Forecast for Anticipated Hiring
U.S. finance executives lead in global rankings on economic
optimism, according to a new survey from American Express
(NYSE:AXP) and Institutional Investor Thought Leadership Studio.
Across the globe, expectations for “substantial” economic expansion
have hit a 10-year high (38%), indicating a surge in optimism. U.S.
expectations for substantial economic expansion lead the world by a
wide margin (69%, up from 23% last year). Seventy percent of
executives worldwide anticipate either “modest” or “substantial”
growth this year, up from 64% last year.
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With this indication of improving global business prospects,
companies’ spending is forecast to increase in the coming year. The
number of respondents overall anticipating moderate spending and
investment (76%) was up substantially from last year (55%).
Moreover, the proportion of respondents anticipating tightly
controlled spending and investment dropped, from 26% in 2016 to
only 6% in 2017.
The findings in the 2017 Global Business & Spending Outlook
by American Express and Institutional Investor¹ are based on a
sampling of 650 senior finance and other corporate executives of
firms with annual revenues of $500 million or more, located in
North America, Europe, Latin America², Asia and Australia.
Responses were gathered in late November and early December 2016.
The results of this cross-industry study were issued today by
American Express.
“After years of embracing a do-more-with-less mantra, many large
and global companies are ready to shift into growth mode,” said
Brendan Walsh, Executive Vice President, American Express Global
Commercial Payments. “Companies are loosening their purse strings
to take advantage of improved opportunities, while at the same time
focusing on top-line growth, on continuing to improve profitability
and on ensuring they remain competitive.”
Staying Competitive, Factors for Success
Large companies are competing on a highly competitive playing
field that will require a new level of technological and managerial
savvy. More than half (53%) of all finance executives surveyed
identify remaining competitive with other companies as among their
top business goals for 2017, followed by better meeting customer
needs (48%). To stay competitive, the overall polled group of
businesses will focus on a number of areas including:
- Customer Service
- 50% say pressure on their companies to
compete on the basis of customer service has increased
substantially in recent years
- 81% anticipate spending more to improve
customer service over the next year
- Environmental, Social and Governance
- 50% strongly agree that sustainable,
ethical and transparent business practices will be an important
basis for competition in their industries in the near future
- Sophisticated Data Analytics
- 90% agree that sophisticated data
analytics have become a more important basis for decision-making at
their companies in recent years
- 89% say they will spend at least
somewhat more time, attention and money on improving analytics
capabilities over the next year
- 58% say their companies will spend much
more of these resources on improving analytics capabilities over
the next year
Majority Anticipate Increased Workforce, Tap into ‘Gig
Economy’
As companies worldwide increase spending with an eye towards
sustained and profitable growth, they will seek to employ more
workers in 2017. Eighty-five percent of all survey respondents
anticipate an increase in their companies’ number of employees in
the coming year (vs. 75% last year). The percentage of respondents
anticipating that their companies’ employee count will stay the
same or decrease has correspondingly dropped, from 25% last year to
only 15% this year. On average, finance executives expect headcount
to increase by 7% for 2017. (See Expected Employment Increase by
Country Chart for Individual Country Results)
Respondents’ highest priority for hiring is in finance talent
(21%), followed closely by general admin/support staff (19%).
Companies also recognize that difficulty hiring and retaining sales
and support staff is impeding their ability to meet performance
goals (93%).
The gig economy continues to be a major force in the global
labor market:
- 63% say they’re likely to make greater
use of temporary or contract workers in order to meet staffing
needs for the coming year
- 70% confirm that the use of independent
contractors or temporary workers is central to or an important part
of their companies’ employment practices (up from 60% in 2016)
Snapshots by region
North America Most Strongly Optimistic Region in the World:
Most Likely to Plan Increased Hiring
North America now has the most optimistic outlook on economic
prospects worldwide. The percentage of respondents in North America
anticipating substantial economic expansion is at its highest level
(67%) for any region since this study began in 2008 (see
“Expectations for Substantial Economic Growth by Region, 2008-17”
chart). Canadian finance executives are nearly as optimistic about
their economy as their American counterparts. Ninety-three percent
of Canadian respondents expect either “substantial” or “modest”
expansion, up from 63% last year. In the U.S., 95% of respondents
anticipate “substantial” or “modest” growth, compared with 73% last
year.
On average, North American respondents expect their companies’
planned levels of spending and investment for the coming year to
increase by 9% (vs. 13% last year). At the country level within
North America, the U.S. averages at 9%, compared with the 14%
response for 2016. The Canadian average is 8%, vs. 11% in 2016.
American finance executives are most likely to anticipate
increased spending on production inputs (37% of U.S. respondents).
Spending in other categories tied to production and service
delivery, including labor/headcount (32%), is also likely to
increase among U.S. companies. A substantial number of U.S.
respondents also anticipate increased spending on financial
reporting and compliance (30%). Canadian respondents are
particularly likely to expect increased spending in IT categories
including mobile technology (30%) and hardware/IT infrastructure
(27%). Like their U.S. counterparts, Canadian companies also
anticipate increased spending on production inputs (27%) and
labor/headcount (27%).
In North America, finance executives anticipate hiring to
increase by 9% (vs.12% last year), the highest average forecast of
any region. The U.S. (9%, vs. 13% in 2016) and Canada (9%,
unchanged from 2016) are among those countries at the top of the
list predicting an uptick in hiring. Both American (96%) and
Canadian companies (93%) say their performance goals have been
affected most by difficulty in hiring sales and marketing
personnel. In order to address their hiring challenges, both
Canadian and U.S. companies will make greater use of temporary or
contract workers (59% U.S. and 53% Canada) and plan to onshore
positions (58% U.S. and 53% Canada).
European Economic Expansion Plans on the Decline: U.K. Least
Optimistic, Optimism Also Erodes in France and Germany
In Europe, expectations for economic expansion have declined
year over year, with 33% of respondents expressing optimism, down
from 62% in 2016. The U.K. while most positive in the region,
experienced the greatest drop in optimism, with one-third (33%,
down from 75% in 2016) expecting economic expansion. Optimism also
eroded in Germany, where 30% of respondents anticipated economic
growth (down from 57% last year), as well as in France (30%, down
from 47% last year) and Russia (30%, down from 44% last year).
Uncertainty around Brexit’s knock-on effects and upcoming
European elections likely underlie these results.
Germany Plans Greatest Increase in Hiring
in Europe
On average, respondents in Europe expect to see an increase in
hiring of 7% (compared with 6% last year). Finance executives in
Germany are most likely to plan to hire (9%), among the highest in
the world, followed by Russia (7%), France (7%), and the U.K. (6%).
Regardless of country, European companies are in agreement that
there is difficulty hiring sales and marketing staff. In Russia
(100%), the U.K. and Germany (each, 97%) and France (85%),
companies say their performance goals have been affected by
difficulty in hiring sales and marketing staff. To combat their
hiring challenges, companies in Russia (70%) and the U.K. (65%)
will make greater use of temporary or contract workers, and in
France (70%) and Germany (67%) they will make greater use of
offshoring or outsourcing.
Asia/Australia: Majority Predict Economic Expansion, Optimism
in Japan Rebounds
In Asia/Australia, a majority of respondents (84%, up from 58%
last year) anticipate economic expansion over the next year.
Optimism in Japan has rebounded (97% choosing substantial or modest
economic expansion, nearly double 50% in 2016). China has also seen
a sharp rebound in optimism (87%, up from 58% in 2016), helping to
buoy prospects across the region. Australia has seen a rise in
optimism as well (83%, up from 65% last year). India has a less
positive outlook, where optimism has eroded (77%, down from 86%
last year).
India Predicts Greatest Increase in Hiring
Regionally
On average, respondents in Asia/Australia expect to see hiring
increase by 6% (compared to 8% last year). Indian and Chinese
companies plan the greatest increase in hiring (each, 7%), followed
by Australia, Hong Kong and Singapore (each 6%) and Japan (5%).
Executives across Asia/Australia say their performance goals
have been affected by difficulty in filling sales and marketing
positions: Hong Kong (100%), China and Japan (each, 97%) and
Australia and India (each, 83%). In order to address their hiring
challenges, companies in Australia (80%), China (ex-Hong Kong),
Hong Kong, and India, (each, 63%) are particularly likely to make
greater use of temporary or contract workers. Companies in Japan
(63%) are especially likely to move positions from overseas to
domestic locations.
Latin America: Uptick in Economic Confidence
In Latin America, eight-in-ten respondents (80%, up from 73%
last year) anticipate expansion in 2017. Optimism in Argentina
increased by a substantial margin for the second year in a row
(94%, up from 73% last year). Brazil showed a more modest increase,
with 73% of respondents expecting expansion over the next year
(compared with 67% last year). The relatively modest improvement is
likely a reflection of political uncertainty. Optimism in Mexico
eroded slightly, with 73% of respondents anticipating expansion
(down from 79% last year), most likely related to uncertainty
regarding trade relationships and agreements.
Argentina Anticipates Greatest Increase in
Hiring Regionally
In Latin America, Argentina and Brazil are most likely to
anticipate an increase in hiring (with each anticipating an 8%
increase) followed by Mexico (anticipating a 4% increase). Although
respondents in Latin America seem to feel the shortage of sales and
marketing talent slightly less acutely than respondents in other
regions, finance executives across the region most often say that
difficulty hiring sales and marketing talent is impeding their
companies’ ability to achieve their performance goals: Argentina
(94%), Brazil and Mexico (each, 85%). To combat their hiring
challenges, companies across the region will make greater use of
temporary or contract workers: Mexico (70%), Argentina (68%) and
Brazil (67%).
Expected Employment Increase by
Selected Countries:
Country Change Germany
9% Canada
9% U.S. 9% Argentina
8% Brazil 8% India
7% China (ex-Hong Kong)
7% Russia 7% France
7% Hong Kong 6%
U.K. 6% Australia
6% Singapore 6% Japan
5% Mexico 4%
For the full Global Business & Spending Outlook by American
Express and Institutional Investor Research, visit
http://about.americanexpress.com/news/.
Methodology
The 2017 Global Business & Spending Outlook was conducted by
Institutional Investor Thought Leadership Studio1 (IITLS) and is
based on a survey of 650 senior finance executives from companies
around the world with annual revenues of $500 million or more. All
survey responses were gathered after the 2016 U.S. election, in
late November and early December 2016. IITLS estimates the margin
of error for this population to be approximately +/-3.8% at a 95%
level of confidence.
About American Express Global
Commercial Payments
Through its Global Commercial Payments division, American
Express offers a suite of payment and lending products that
help businesses and organizations of all sizes gain financial
savings, control and efficiency. Global Commercial Payments
provides solutions for travel and everyday business spending, cross
border payments, global currency solutions, and business
financing.
To learn more about Global Commercial Payments visit
business.americanexpress.com
To learn more about American Express OPEN, which provides
products and services for small businesses and entrepreneurs in the
United States, visit www.OPEN.com
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more
at americanexpress.com and connect with us
on facebook.com/americanexpress,
foursquare.com/americanexpress, linkedin.com/company/american-express,
twitter.com/americanexpress,
and youtube.com/americanexpress.
Key links to products, services and corporate responsibility
information: charge and credit cards, business credit cards, Plenti
rewards program, travel services, gift cards, prepaid cards,
merchant services, Accertify, corporate card, business travel
and corporate responsibility.
About Institutional
Investor
Institutional Investor is among the world’s leading investment
information brands. Its highly regarded content reaches a globally
influential audience across an array of media platforms,
conferences, seminars, training courses, capital markets databases
and emerging markets information service. Institutional Investor’s
Thought Leadership Studio works closely with its clients to design,
execute, and publish independent primary research projects on
topics of interest to its audience.
For more information on II’s custom research capabilities,
contact Sam Knox, managing director of custom research, at
sam.knox@institutionalinvestor.com.
_______________________________
1 From 2008 to 2016, CFO Research, a unit of CFO Publishing LLC,
conducted this annual study in collaboration with American Express.
All survey data prior to 2017 cited in this report was gathered and
verified by CFO Research. ²In the Global Business & Spending
Outlook, Mexico is grouped with the Latin American economic region
due to economic similarities, rather than with the United States
and Canada.
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version on businesswire.com: http://www.businesswire.com/news/home/20170315005070/en/
M BoothAlex Della Rocca, 212-539-3203Alexd@mbooth.comorAmerican ExpressMelissa Filipek,
212-640-8658melissa.j.filipek@aexp.com
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