Trump's first few weeks in office have been hugely controversial and have sparked protests across the US but business leaders tell another story, with confidence in the economy rising for 2017.
This is the overall finding of a survey by Deloitte, conducted after the US election in November 2016, which shows that business executives in the private and middle-market segment expect 2017 to see economic growth, following years of sluggish economic recovery. America’s economic engine - Breaking the cycle found that the majority of respondents were optimistic that the US economy would grow in the short term and that revenues would increase by more than 5 per cent. About two-thirds of business leaders expect the US election result to have a positive impact on their company's operations.
These are some of the key findings that suggest business optimism:
- 83 per cent of executives are confident that the US economy will improve over the next two years (this figure was 65 per cent last year);
- 39 per cent expect the US economy to grow by more than 3.5 per cent over the next 12 months;
- 78 per cent expect revenue growth in excess of 5 per cent.
- 66 per cent say the US election results will boost the US economy;
- 63 per cent think the new administration will have a positive impact on their company’s operations.
Confidence mixed with uncertainty
However, this confidence is mixed with uncertainty, as 70 per cent feel more uncertain than they did a year ago about the main factors driving their future business prospects. Deloitte's Bob Rosone says: “Certain economic and geopolitical issues are among the obstacles these executives cite in the survey. However, the respondents appear hopeful that these challenges might be addressed with policy changes by the new administration.”
Main obstacles to growth
The main obstacles to business growth cited by the survey's respondents were: increased regulatory compliance, the pace of technological developments, rising health care costs and skills shortages. The number one factor that would boost business in the coming year was a reduction in corporate tax rates. And in terms of keeping up with technology, the priority for US business leaders was investing in the Cloud, data analytics and in customer relationship management technology. A skills shortage is also troubling many companies: 72 per cent said they have difficulty finding new employees with the right skills and education.
CTMFile take: Business leaders will be carefully watching President Trump's policies on reducing corporate tax and making changes to health care in the US. Trump's avowal to repeal some of the regulation affecting financial services in the Dodd-Frank Act is likely to affect consumers and financial institutions more than corporates. But how he handles important economic issues such as the dollar exchange rate and interest rates (issues not wholly within his control) will have a big impact on his popularity with business leaders.
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