A common and interesting theme running throughout many of the surveys out there: Executives and even employees are more optimistic, and some companies are even reporting an increase in orders, but they are still reluctant to commit to capital spending plans, or to rehire or build their employment again. In fact, I had to check the dates of these survey releases more than once to make sure I wasn’t looking at data from 6-9 months ago. It goes to what the Knowledge@Wharton article I cited in a blog earlier this week said – it could be a "jobless recovery," a different flavor of recovery than others in recent memory.
The juxtaposition between the increased optimism expressed in these surveys and the muffled plans for spending and hiring struck me. A survey, as detailed in this MDM news story posted today, says that what could be continuing to put a damper on spending and hiring is the difficulty or the expense of getting credit, which means putting corporate initiatives on hold. Forty-seven percent in the Duke/CFO Magazine survey say they now face more restrictive terms when borrowing, such as being required to post higher collateral. (More on that survey at www.cfosurvey.org.)
Among attractive investment projects that were skipped in the past 18 months, CFOs in that survey say 58% of those projects have been postponed indefinitely and 26% have been permanently cancelled.
With all of these factors, the recovery will be one to watch and may be just as difficult to navigate successfully as the downturn itself.
Links to some of the surveys released in the past month:
National Federation of Independent Business Small Business Economic Trends: September 2009
Gain seen in the organization’s key confidence index attributed mostly to improved expectations for future business conditions and real sales volumes.
Gain seen in the organization’s key confidence index attributed mostly to improved expectations for future business conditions and real sales volumes.
American Express Small Business Monitor
Hiring plans hit all-time low in this survey’s history.
Hiring plans hit all-time low in this survey’s history.
Cautious optimism the rule of the day, according to this survey.
