2020 is here and middle market executives remain largely confident about their businesses. But according to J.P. Morgan’s 2020 Business Leaders Outlook shows that optimism beyond their own balance sheets is increasingly couched in caution. According to the data - and the bank’s experts - their concerns reflect the ever-growing complexity and costs of finding qualified talent while growing in the global marketplace.
The report suggests that the responses are not unexpected. Headlines in the past year have touted anxieties of a pending downturn as the pace slows on the longest-running US economic expansion on record.
In the 10 years of the Business Leaders Outlook, the survey has followed the recovery’s progress and provided a yearly snapshot of the big shifts and nuances of doing business today, from tracking the decline of concern over regulatory requirements to the rise of hiring difficulties.
A majority of businesses (55%) plan to increase hiring, but finding qualified candidates (49%) and managing associated costs (43%) are top challenges with the unemployment rate hovering around 3.5% to close 2019.
Despite increasing caution toward the global economy, two-thirds of midsized businesses (67%) expect their global sales to increase in next five years. As a result, trade uncertainties and tariffs are a big concern to 47% of respondents.
As emerging technologies and cybersecurity risks become a daily part of doing business, more executives report taking action to prepare for disruption while taking advantage of new opportunities. For cyber threats specifically, 94% of companies said they’ve taken actions to prepare.
Opportunities abound in 2020 despite slowing economic growth
The Business Leaders Outlook survey is a snapshot of the top-of-mind issues for businesses for the year ahead. J.P. Morgan says that businesses should keep the following considerations in mind throughout 2020 to help navigate these issues:
Don’t be fazed by the US economy’s new normal
The durability of today’s expansion is unlike anything we’ve seen before. Rather than compare to business cycles of the past, look instead to key metrics like unemployment and inflation to get a fuller picture of the economy’s health. With strong fundamentals and no clear recessionary trigger, it seems likely the expansion could continue at a slower pace for a sustained period.
Embrace technological change head-on
The most successful businesses are using technology to stay ahead of the competition, drive efficiency and build a seamless customer experience. Evaluate the latest tools to make sure your business isn’t left behind.
Educate staff on cybersecurity
With the pace of cyberattacks rapidly accelerating, 2020 is the year to make cybersecurity a priority. Defenses are only as strong as your least-prepared employee, so investing in training and controls can help protect against the threat of sophisticated attacks.
Make your values central to your business
In a tight labour market, defining and investing in your company’s environmental, social and governance priorities can be a differentiator in employee recruitment and retention.
Take advantage of global expansion
Despite geopolitical complexity, international business opportunities are too significant to ignore - and the ease of technology and travel make them more accessible than ever for companies. Evaluate global markets and supply chains carefully to determine how to best reach new customer bases.
About the survey
In its 10th year, the 2020 Business Leaders Outlook online survey is a snapshot of the current business environment based on the responses of 885 senior executives from US middle market companies with annual revenues from US$20-500m. Industries include manufacturing, technology and disruptive commerce, heavy equipment, agribusiness, beverage and many others.
This year’s survey was conducted October 29 to November 19, 2019. For year-over-year trends, 2020 and 2019 data is compared to data collected in the early first quarter of 2011-2018. Results are within statistical parameters for validity; the error rate is plus or minus 3.33% at the 95% confidence interval.
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