Detailed Survey Results 4Q 2016

Transcription

1 Detailed Survey Results 4Q

2 Survey Background Conducted between November 9-30, 2016 Quarterly Survey CPA decision makers (primarily CFOs, CEOs and Controllers) AICPA members in Business & Industry only 600 qualified responses 2

3 Survey Highlights 74 Overall index improved Up from 69 last quarter, and 69 in Q All components up quarter to quarter and year to year Organization optimism up from 68 to 74 Revenue index increases three points from 75 to 78; profits from 69 to 74 Hiring and spending plans also improve 62% Now optimistic about US Economy Up from only 38% in Q3 Outlook for economy at highest level since 1Q 2015 Optimism in retail bounces back from only 33% in Q3 to 50% optimistic in Q4 Manufacturing and other sectors also show improved optimism 62% Have plans for expansion Index component improves from 72 to 74 as those with plans to contract lower than Q3 Plans for companies with revenues >$100 million to < $1 billion increase from 59% to 67% Expansion plans for companies with revenues > $1 billion ease from 66% to 62% 3

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5 CPA Outlook Index The CPA Outlook Index is a robust measure of sentiment about the U.S. economy that is supported by the unique insight and knowledge that CEOs, CFOs, Controllers, and other CPA executives have about the prospects for their own organizations, their expectations for revenues and profits, and their plans for spending and employment. The CPA Outlook Index is the composite of the following nine indicators at equal weights: U.S. Economy Optimism - Respondent optimism about the U.S. economy Organization Optimism - Respondent optimism about prospects for their own organization Expansion Plans - Respondent expectations of whether their business will expand over the next 12 months Revenue - Expectations for increases or decreases in revenue over the next 12 months Profits - Expectations for increases or decreases in profits over the next 12 months Employment - Expectations for increases or decreases in headcount over the next 12 months IT Spending - Plans for IT spending over the next 12 months Other Capital Spending - Plans for capital spending over the next 12 months Training & Development - Plans for spending on employee training and development over the next 12 months A reading above 50 indicates a generally positive outlook with increasing activity. A reading below 50 indicates a generally negative outlook with decreasing activity. 5

6 CPA Outlook Index (CPAOI) CPA Outlook Index CPA Outlook Index 4Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q

7 CPA Outlook Index Component Indicators Component 4Q15 1Q16 2Q16 3Q16 4Q16 Q to Q Y to Y U.S. Economic Optimism Organization Optimism Expansion Plans Revenue Profits Employment IT Spending Other Capital Spending Training & Development Total CPAOI

8 CPA Outlook Index (CPAOI) vs. GDP CPA Outlook Index 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% CPA Outlook Index Change in GDP GDP Growth 3Q15 4Q15 1Q16 2Q16 3Q16 4Q % 1.4% 0.8% 1.4% 3.2% -6.0% -8.0% -10.0% 8

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10 US Economy and Organization Highlights 62% Optimism for US economy up from only 38% in Q3 61% Organizational optimism up from 53% in Q3 28% Inflation concerns increase to 2014 levels Election results cited by both optimists and pessimists Optimists noted hopes for reduced regulation, repeal of ACA and lower income taxes Pessimists noted global unrest, healthcare costs, oil prices and anticipated interest rate increases Optimism for respondent s own organization at 61% is higher than any period since 1Q 2015 The percentage of companies with expansion plans maintained the Q3 level of 62% The percentage of companies expecting their businesses to contract eased from 17% in Q3 to 14% in Q4 Concern about labor costs continues to be most significant but eased from 55% to 43% Raw material cost increases now concern 20% up from 18% in Q3 Energy cost and interest rate concerns both jumped Energy from 5% to 10% Interest from 14% to 23% 10 10

11 Optimism & Expansion U.S., Organization, Expansion 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 U.S. 19% 43% 34% 22% 21% 32% 49% 44% 38% 49% 51% 52% 64% 68% 52% 48% 45% 28% 37% 38% 62% Organization 45% 55% 54% 44% 41% 50% 57% 55% 57% 59% 61% 65% 67% 63% 58% 59% 53% 44% 53% 53% 61% Expansion 59% 61% 61% 56% 50% 58% 62% 62% 62% 63% 64% 68% 71% 64% 61% 60% 57% 52% 58% 62% 62% 11 11

12 For your business, are you more concerned about inflation or deflation? For your business, over the next 6 months, are you more concerned about the possibility of? 100% Inflation or Deflation? 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 43% 37% 38% 36% 35% 33% 32% 31% 30% 31% 32% 29% 27% 23% 23% 25% 23% 22% 23% 18% 28% 11% 9% 6% 10% 9% 10% 6% 7% 7% 7% 8% 12% 10% 10% 11% 6% 5% 4% 14% 12% 11% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Inflation Deflation 12

13 Inflationary Risks and Costs Inflationary Factor Representing the Most Significant Risk to your Business 37% 44% 44% 43% 2% 3% 0% 4% Food costs 1% 12% 6% 11% 5% Energy costs 10% 23% 19% 20% 20% 18% Raw material costs Labor costs 22% 23% 19% 16% 14% Interest rates 4Q15 2% 12% 23% 37% 22% 5% 1Q16 3% 6% 19% 44% 19% 9% 2Q16 0% 11% 20% 44% 16% 9% 3Q16 4% 5% 18% 55% 14% 4% 4Q16 1% 10% 20% 43% 23% 4% 5% 9% 9% Other 4% 4% 13 13

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15 Key Performance Indicator Highlights Revenues and Profits Revenue and Profit projections both improve Expected revenue increase for coming twelve months improves from 2.9% in Q3 to 3.6% in Q4 Profit projections also increase from a 2.3% expected increase in Q3 to 3.1% in Q4 Hiring and Employment Headcount plans improve; costs also tick up Anticipated increases in headcount for the coming year increased to 1.6% in q4, up from 1.3% in Q3. Salary and benefit costs are expected to increase at a rate of 2.3%, up from 2.1% in Q3. Healthcare cost projections also jumped from 5.6% to 6.1%, the highest expected rate of increase since Q Spending Plans R&D spending and other capital lead the improvements Spending for IT continues to lead the league, projected at 2.9% in Q4 Training remains constant at 1.6% quarter to quarter Other capital spending anticipated increase improves from 2.4% in Q3 to 2.7% in Q4 R&D spending jumps from 1.1% in Q3 to 1.5% in Q4, the highest expected rate increase since Q

16 Key Performance Indicators Expected Growth in Revenue and Profits Thinking about the coming 12 months, please comment on the probable change for your organization for 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Revenue 2.8% 3.5% 3.1% 2.6% 2.1% 3.0% 3.1% 3.3% 3.6% 3.6% 3.8% 4.4% 4.7% 3.6% 3.2% 3.3% 2.9% 1.7% 3.0% 2.9% 3.6% Profit 2.4% 2.9% 2.6% 2.2% 1.4% 2.1% 2.4% 2.5% 2.7% 2.9% 2.9% 3.6% 3.9% 2.8% 2.4% 2.6% 2.0% 0.7% 1.5% 2.3% 3.1% 16 16

17 Employees, Salary & Benefits and Healthcare Costs Thinking about the coming 12 months, please comment on the probable change for your organization 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Employees 1.2% 1.5% 1.1% 0.8% 0.5% 1.1% 1.0% 1.3% 1.2% 1.5% 1.3% 1.8% 2.1% 1.6% 1.5% 1.3% 1.0% 0.5% 1.1% 1.3% 1.6% Salary & Benefits 2.1% 2.0% 2.0% 1.9% 1.9% 2.2% 2.2% 2.3% 2.2% 2.2% 2.1% 2.4% 2.5% 2.0% 2.1% 2.0% 1.8% 1.4% 1.8% 2.1% 2.3% Healthcare 6.0% 6.2% 6.3% 6.4% 6.4% 6.3% 6.7% 6.8% 6.6% 6.2% 5.7% 6.6% 5.9% 5.8% 5.8% 5.8% 5.4% 5.4% 5.7% 5.6% 6.1% 17 17

18 Pricing & Other Costs Average Change Expected Thinking about the coming 12 months, please comment on the probable change for your organization 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Prices Charged 1.2% 1.4% 1.2% 1.2% 1.1% 1.3% 1.1% 1.3% 1.3% 1.3% 1.8% 1.7% 1.7% 1.4% 1.4% 1.6% 1.5% 0.8% 1.3% 1.5% 1.8% Input Prices 2.1% 2.1% 1.9% 1.9% 1.9% 2.0% 1.8% 1.9% 1.8% 1.8% 2.4% 2.3% 2.1% 2.1% 2.0% 2.2% 2.1% 1.5% 2.1% 1.9% 2.4% 18 18

19 Spending Plans IT, Other Capital & Training Thinking about the coming 12 months, please comment on the probable change for your organization for 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 IT 2.7% 2.8% 2.8% 2.4% 2.1% 2.7% 2.8% 2.7% 2.9% 3.2% 3.1% 3.3% 3.3% 3.1% 3.1% 3.0% 2.8% 2.3% 2.6% 2.8% 2.9% Other Capital 2.2% 2.1% 2.0% 1.7% 1.3% 1.9% 2.2% 2.2% 2.1% 2.3% 2.4% 2.9% 3.2% 2.4% 2.4% 2.5% 2.4% 1.5% 2.1% 2.4% 2.7% Training 1.2% 1.4% 1.2% 1.0% 0.7% 1.3% 1.3% 1.3% 1.5% 1.7% 1.8% 2.0% 2.2% 1.6% 1.8% 1.4% 1.4% 1.1% 1.3% 1.6% 1.6% 19 19

20 Spending Plans Marketing & R&D Thinking about the coming 12 months, please comment on the probable change for your organization for 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Marketing 1.8% 1.8% 1.5% 1.1% 1.0% 1.5% 1.4% 1.5% 1.5% 1.7% 1.6% 1.6% 1.8% 1.6% 1.8% 1.6% 1.6% 1.4% 1.4% 1.4% 1.5% R&D 0.9% 1.2% 1.0% 0.6% 0.6% 0.9% 1.0% 1.0% 1.0% 1.0% 1.0% 1.2% 1.3% 1.3% 1.2% 1.7% 1.2% 0.9% 1.1% 1.1% 1.5% 20 20

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22 Hiring Plans 55% Hiring plans continue to improve 35% More than 1/3 have too few employees 55% of all companies say they have the appropriate number of employees Returning to levels seen in Q and Q Excess number of employees eased four points to only 9% down from 13% in Q3 The percentage with too few employees who are reluctant to hire declined to 15% Down two points from Q3 and three points from 18% in Q Those with too few employees that are planning to hire eased a point from 21% in Q3 to 20% in Q

23 Overall staff situation relative to your needs Given current conditions, how would you characterize your overall staffing situation relative to your needs (i.e., do you have excess capacity or are employees stretched)? 55% 53% 53% 49% 48% 13% 12% 13% 10% 9% 17% 18% 16% 17% 15% 21% 18% 19% 20% 15% 2% 3% 2% 1% 1% We have an excess number of employees We have approximately the appropriate number of employees We have too few employees, but are hesitating to hire We have too few employees and are planning to hire 4Q15 10% 53% 17% 18% 2% 1Q16 13% 53% 16% 15% 3% 2Q16 12% 49% 18% 19% 2% 3Q16 13% 48% 17% 21% 1% 4Q16 9% 55% 15% 20% 1% Other 23 23

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25 Top Challenges Facing Organizations Regulatory requirements maintained their place at the top of the challenges list Employee and benefit costs jumped three spots to the second place in the ranking of challenges Domestic economic challenges, availability of skilled personnel and domestic competition each fell one slot this quarter Developing new products and services jumped from ninth place to sixth place, switching places with concern about stagnant/declining markets which fell from sixth to ninth Domestic political leadership maintained the seventh spot Changing customer preferences returned to the top ten, claiming eighth place, the same as the Q ranking Staff turnover similarly returned to the top ten for the first time since it claimed the number ten slot in Q

26 Top Challenges for Organizations Please indicate the top three challenges for your organization 4Q 15 1Q16 2Q16 3Q16 4Q16 1 Regulatory requirements/changes Domestic economic conditions Regulatory requirements/changes Regulatory requirements/changes Regulatory requirements/changes 2 Domestic economic conditions Regulatory requirements/changes Domestic economic conditions Domestic economic conditions Employee and benefits costs 3 Domestic competition Stagnant/declining markets Availability of skilled personnel Availability of skilled personnel Domestic economic conditions 4 Availability of skilled personnel Domestic competition Domestic competition Domestic competition Availability of skilled personnel 5 Stagnant/declining markets Availability of skilled personnel Employee and benefits costs Employee and benefits costs Domestic competition 6 Employee and benefits costs Employee and benefits costs Stagnant/declining markets Stagnant/declining markets Developing new products/services/markets 7 Global economic conditions Domestic political leadership Domestic political leadership Domestic political leadership Domestic political leadership 8 Changing customer preferences Financing (access/cost of capital) Developing new products/services/markets Liquidity Changing customer preferences 9 Domestic political leadership Developing new products/services/markets Liquidity Developing new products/services/markets Stagnant/declining markets 10 Global economic conditions Domestic political leadership Energy costs Financing (access/cost of capital) Staff Turnover 26 26

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28 Industry, Region and Business-size Outlook - 1 of 3 Optimism Improves for Retail, Wholesale Trade and Manufacturing Construction, Real Estate and Finance & Insurance also see improved optimism Retail trade optimism improved from 33% in Q3 to 50% in Q4 Wholesale trade optimism also improved slightly from 45% to 48% Manufacturing optimism also improved from 47% to 55% Construction optimism improved from 69% in Q3 to 75% in Q4 Real Estate and Property improved from 62% to 69% Finance & Insurance from 57% to 66% optimistic Hiring for retail continues to be soft and eased further from a projected rate of 1.1% in Q3 to only 0.8% in Q4 Manufacturing hiring improved from 1.4% to 1.7% Construction hiring improved from 1.0% to 2.0 % Real Estate hiring improved from 1.5% to 1.7% Finance and Insurance maintained its 1.8% rate Banking sector hiring is also expected to improve considerably, up from 0.6% in Q3 to 2.3% in Q

29 Industry, Region and Business-size Outlook - 2 of 3 Technology and Professional Service see declines in Optimism Technology optimism eases slightly from 71% in Q3 to 67% in Q4 Professional service optimism falls off sharply from 67% to only 48% optimistic Technology hiring also falls off from 4.86% in Q3 to 2.0% in Q4 Professional service hiring continues to be strong; eases slightly from 3.2% in Q3 to 2.5% in Q4 Healthcare providers constant; Healthcare other up significantly Healthcare providers maintained their relative optimism, improved a point to 69% in Q4, up from 68% in Q3 Healthcare other jumped significantly from only 50% optimistic in Q3 to 80% optimistic in Q4 Healthcare providers also top the list in terms of plans for increased hiring in the coming year at a 2.8% rate 29 29

30 Industry, Region and Business-size Outlook - 3 of 3 South and Midwest regions see improvement in optimism South optimism in South bounces back from 48% in Q3 to 68% in Q4 Midwest also recovers, improving from 53% to 62% optimistic in Q4 West improves slightly from 57% to 59% Northeast gives up two points, falling from 58% to 56% Smallest and largest employers most hesitant to hire Employers with > $1 billion in revenues is the segment with the highest percentage of respondents (13%) with excess employees; they are also the segment with too few employees (34%). However, 22% of the largest companies with too few employees are hesitant to hire. Employers with revenues < $10 million are also mixed; only 6% have excess employees; while 30% have too few employees, only 11% are planning to hire; 19% are hesitant. Plans to hire are highest in the category of employers with revenues in the $100 million to $1 billion category at 27% 30 30

31 Organization Optimism by Industry 100% 80% 60% 40% 20% 66% 69% Retail Trade 85% 65% 39% 28% 50% 33% 50% 100% 80% 60% 40% 20% 66% Wholesale Trade 65% 54% 54% 42% 50% 45% 48% 23% 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 100% 80% 60% 40% Manufacturing 71% 63% 55% 53% 41% 48% 48% 47% 55% 100% 80% 60% 40% 50% 80% Technology 60% 67% 52% 53% 61% 71% 67% 20% 20% 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q

32 Organization Optimism by Industry 100% 80% 60% Construction 78% 83% 64% 64% 59% 59% 51% 69% 75% 100% 80% 60% Real Estate 64% 68% 65% 69% 48% 52% 62% 62% 69% 40% 40% 20% 20% 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 100% Finance & Insurance 100% Professional Service 80% 60% 71% 66% 74% 65% 49% 41% 58% 57% 66% 80% 60% 68% 72% 64% 68% 60% 46% 70% 67% 48% 40% 40% 20% 20% 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q

33 Organization Optimism by Industry 100% 80% 60% 40% 20% 75% Health Care Other 67% 67% 63% 56% 50% 50% 44% 80% 100% Health Care Provider 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 80% 60% 40% 65% 49% 47% 69% 38% 52% 69% 68% 69% 20% 0% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q

34 Expected Employment Change by Industry Thinking about the coming 12 months, please comment on the probable change for your organization for Number of Employees Healthcare Provider Professional Services Banking Technology Construction Trans & Distribution Q4 Mining Q3 Finance and Insurance Manufacturing Not for Profit Real Estate Property Retail Trade

35 Organization Optimism by Region Please select the rating that best describes your view for the economic outlook for your own organization for the next 12 months. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4Q15 1Q16 2Q16 3Q16 4Q16 South 48% 38% 53% 48% 68% Midwest 55% 45% 53% 53% 62% West 55% 55% 54% 57% 59% Northeast 58% 48% 62% 58% 56% 35 35

36 Expansion Plans by Business Size Please indicate whether you expect your business to expand or contract over the next 12 months 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 52% of all businesses expect to expand a little in the next twelve months 10% expect to expand a lot. 36% expect to contract a little or stay the same Only 1% expect to contract a lot vs 4% in Q3 0% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 < $10 million 54% 55% 58% 50% 44% 52% 53% 56% 56% 56% 59% 59% 65% 59% 47% 61% 52% 44% 55% 53% 52% $10 to <$100 million 56% 60% 59% 58% 52% 58% 63% 61% 63% 62% 65% 69% 72% 63% 66% 62% 57% 59% 61% 65% 63% $100 million to <$1 billion 62% 66% 66% 56% 53% 63% 63% 64% 62% 71% 65% 73% 72% 67% 65% 60% 57% 50% 61% 59% 67% > $1 billion 69% 65% 62% 54% 53% 68% 68% 68% 64% 69% 66% 71% 75% 77% 53% 56% 59% 49% 50% 66% 62% 36 36

37 Businesses in the >$1 billion range are most likely to have excess employees Given current conditions, how would you characterize your overall staffing situation relative to your needs (i.e., do you have excess capacity or are employees stretched)? 63% 58% 52% 47% 6% 9% 13% 10% We have an excess number of employees We have approximately the appropriate number of employees We have too few employees, but are hesitating to hire We have too few employees and are planning to hire < $10 million 6% 63% 19% 11% 1% $10 to <$100 million 9% 58% 12% 21% 0% $100 million to <$1 billion 10% 47% 14% 27% 2% > $1 billion 13% 52% 22% 12% 1% 19% 12% 14% 22% 11% 21% 27% 12% 1% 0% 2% Other 1% 37 37

38 Survey Within a Survey 2016 Elections impact on business Liquidity plans and expectations 38 38

39 Presidential Election A Factor in Business Planning? Now that you know the outcome of the 2016 presidential election, how much will the outcome be a consideration or factor in your company s business planning, budgeting or forecasting for the next fiscal year? SIGNIFICANT FACTOR 15% MODERATE FACTOR 30% SLIGHT OR SOMEWHAT A FACTOR 30% NOT A FACTOR 25% 0% 5% 10% 15% 20% 25% 30% 35% 39 39

40 Presidential Election Most likely impact on hiring What are your company s most likely actions concerning job creation and hiring, now that the presidential election has been decided? ELECTION IS NOT A FACTOR IN HIRING 44% CONTINUE TO HIRE AT CURRENT PACE 36% DEFER NEW HIRING (ONLY REPLACE ESSENTIAL PERSONNEL) 9% INCREASE HIRING 9% REDUCE NEW HIRING 2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 40 40

41 Presidential Election Type of position most likely if hiring If you were to hire more people, what type of position would you hire most of: FULL-TIME EMPLOYEES 71% PART-TIME EMPLOYEES 11% I DON'T KNOW 8% CONTRACT EMPLOYEES 6% TEMPORARY EMPLOYEES 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 41 41

42 Presidential Election Capital spending and business expansion plans With the presidential election over, what are your company s most likely actions concerning capital expenditures and business expansion, including borrowing and financing? CONTINUE TO SPEND ON CAPITAL EXPENDITURES AND BUSINESS EXPANSION AT CURRENT PACE 40% ELECTION OUTCOME IS NOT A FACTOR IN CAPITAL EXPENDITURES AND BUSINESS EXPANSION SPENDING 38% INCREASE CAPITAL EXPENDITURES AND BUSINESS EXPANSION SPENDING 13% DEFER CAPITAL EXPENDITURES AND BUSINESS EXPANSION SPENDING 6% REDUCE CAPITAL EXPENDITURES AND BUSINESS EXPANSION SPENDING 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 42 42

43 Liquidity - Current Position How would characterize your organization s current liquidity position? ABOUT RIGHT 49% MORE THAN WE NEED, BUT RELUCTANT TO DEPLOY 18% MORE THAN WE NEED AND PLAN TO DEPLOY 14% LESS THAN WE NEED, AND PLAN TO RAISE CAPITAL 11% LESS THAN WE NEED, BUT CREDIT/CAPITAL AVAILABILITY AND/OR PRICING IS A BARRIER 8% 0% 10% 20% 30% 40% 50% 60% 43 43

44 Liquidity - Expectations for financing difficulty Do you expect it to be more or less difficult to obtain your required financing in the coming year? ABOUT THE SAME 58% NA 18% MORE DIFFICULT 13% LESS DIFFICULT 11% 0% 10% 20% 30% 40% 50% 60% 70% 44 44

45 Liquidity Plans for level of corporate cash holdings Are you planning on reducing your corporate cash holdings in the next 12 months? If so, to what degree? NO, MAINTAINING LIQUIDITY HOLDINGS 59% NO, PLANNING TO ADD TO LIQUIDITY HOLDINGS 14% YES, A BIT 14% YES, MODERATELY 11% YES, SIGNIFICANTLY 2% 0% 10% 20% 30% 40% 50% 60% 70% 45 45

46 Liquidity Plans for companies reducing their cash holdings? If you indicated that you plan to reduce cash holdings, what are your plans for the cash? (Check all that apply percentages add to more than 100% due to multiple plans) CAPITAL PROJECTS 36% BUSINESS EXPANSION/HIRING 20% REDUCING DEBT 20% DIVIDEND OF OTHER EQUITY DISTRIBUTION 19% ACQUISITION OF OTHER BUSINESS TRANSACTION 18% STOCK BUYBACK 7% SHIFTING TO LONGER-TERM INVESTMENT MIX 6% OTHER/NOT SURE 30% 0% 5% 10% 15% 20% 25% 30% 35% 40% 46 46

47 Liquidity Placement of funds shifted in response to money market regulations Have you taken any steps to shift your cash allocation from money market funds in response to new regulations that limit this practice? If so, where are you putting the funds? NO, WE HAVEN'T SHIFTED ALLOCATION 80% NOT SURE 11% GOVERNMENT FUNDS 4% OTHER (PLEASE SPECIFY) 3% EXCHANGE-TRADED FUNDS 1% SHORT-TERM BOND FUNDING 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 47 47

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49 Demographics Position Size of Organization Type of Organization 1% 5% 5% 4% 12% 2% 13% 20% 1% 12% 17% 7% 4% 20% 6% 12% 1% 43% 11% 34% 69% CEO/President COO VP CFO CAO/CAE CIO Controller Director Accounting, Audit, Tax or Technology Manager Other $0 to under $10 million $10 million to under $50 million $50 million to under $100 million $100 million to under $250 million $250 million to under $500 million $500 million to under $1 billion $1 billion or more Publicly Listed Company Privately Owned Entity Government Not for Profit Other 49 49

50 For additional information contact: Kenneth W. Witt, CPA, CGMA Lead Technical Manager Management Accounting Cary Jones Associate Manager Business, Industry & Government Team 50 50