Amid an unprecedented global pandemic and disruptions to the economy, more than half of business leaders (53%) expect their companies to return to normal in the next 12 months, according to JPMorgan Chase’s Business Leaders Outlook Pulse Survey. The majority of business leaders remain hopeful in the face of adversity: while most (83%) are running at a reduced capacity, 68% are confident their businesses will thrive and just 2% are concerned their businesses may not survive.
Looking ahead to the next six months, more than half of business leaders (56%) are optimistic about their companies, but confidence dwindles on broader levels. Approximately one in three respondents are optimistic about the local economy (33%) and national economy (35%), while confidence in the global economy is considerably lower at 17%.
“It’s been incredible to witness the resilience, flexibility and innovation of America’s businesses during an extraordinarily difficult year for all people around the world,” said Jim Glassman, head economist at JPMorgan Chase Commercial Banking. “From speaking with business leaders across the country, it’s clear that some of the most agile companies are gaining market share, particularly in industries like technology and e-commerce.”
Top five actions business leaders are taking
Conserving capital for unforeseen needs
Most business leaders (87%) have already built up their cash reserves or plan to do so in the next three months. Not surprisingly, 71% have either reduced their spending on capital expenditures or are planning to do so.
Learning from the crisis
With continued uncertainty around economic conditions and a potential second wave of COVID-19, 82% of businesses have already prepared or are planning to prepare for a similar event in the future.
Managing business finances digitally
The majority of business leaders (59%) have either already increased or plan to increase their use of digital banking and treasury management tools to manage cash flow, send and receive payments, and streamline operations.
Implementing permanent changes to operating models
As a result of implementing remote working capabilities, more than half (56%) of business leaders have already made permanent changes to their operating models or plan to do so in the next three months.
Shifting the business online
More than half (54%) of business leaders have also shifted their operating models to be more online or plan to do so, as a result of pandemic-related closures and shifting consumer habits.
While many business leaders are cautiously optimistic about the future, they are faced with the realities of an unpredictable operating environment. Their top three challenges are as follows.
Uncertain economic conditions
The vast majority of business leaders surveyed (70%) cited economic uncertainty - both domestically and globally - as the leading challenge facing their business operations.
Revenue and sales growth
Some 59% of business leaders are concerned about growing sales, though with certain industries seeing an uptick in demand, 47% reported that they’re expecting an increase in revenue and sales within the next six months.
Shifting customer habits due to COVID-19
The pandemic accelerated a behavioural shift of consumers leaning in to e-commerce technology for purchasing, in addition to spending more conservatively overall. Changing consumer habits is a leading concern for 33% of business leaders.
Three tips for getting through 2020
JPMorgan Chase says that businesses should keep the following considerations top-of-mind in navigating the remainder of the year:
- Harness the power of workplace technology. COVID-19 has accelerated the evolution of remote working, and now is the time for businesses to implement digital tools to enhance productivity.
- Enhance digital security protocols. Business email compromise (BEC) is among the most serious threats that face businesses - particularly in times of crisis.
- Proactively prepare for future disruption. Recent events have reinforced that businesses across industries and of all sizes should have solid business resiliency plans in place before crises happen.
JPMorgan Chase’s Business Leaders Outlook survey was conducted online between 22-29 June 2020 for middle market companies with annual revenues between US$20m and US$100m. In total, 524 business leaders in various industries across the US participated in the survey. The results of this survey are within statistical parameters for validity, and the error interval is +/-4.3% at a 95% confidence level.
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