Q3 2012 Business Barometer Results

• Deterioration in growth outlook among executives. The percentage of executives anticipating top-line revenue growth in the next 12 months decreased from 69% to 59%.  Executive expectations about growth of industry peers deteriorated as well: 47% of executives expect higher industry revenues (down from 57% last quarter).
• Expectations for new orders & production continue to decline: The outlook for new orders weakened with 51% of operations executives now expecting an increase (down from 66% in Q2 2012). Moreover, only 48% of respondents expect higher production levels in the next twelve months (versus 61% last quarter).
• Expectations for consumer confidence as well as sales to new customers took a turn for the worse: executive sentiment about consumer confidence fell down to the second lowest reading: 20% of executives now expect consumer confidence to improve in the next twelve months (down from 38% in Q2). Sixty-three percent of sales executives expect higher sales to new customers (down from 71% in Q2).

Cost Concerns Eased

• Executive concern about cost pressure eased down.Sixty-six percent of executives expect cost pressure to increase, down from 71% in Q2 2012.
  • Expectations for energy costs, major non-energy commodities, and core input prices improved: 46% believe energy costs will rise (down from 64% last quarter); 50% expect core input price to rise (down from 68% in Q2); 33% anticipate increases in non-energy commodities (down from 42% in Q2).
• Budget outlooks remain tight.  More finance executives (45%) expect general and administrative expenses to shrink in the next year than those (32%) who expect them to grow. Even fewer executives expect higher budgets in Finance and Marketing (16% and 24%).

Investment Expectations Subside and Hiring Outlook Deteriorates

• More executives expect headcout to shrink than those who anticipate headcount to grow: Only 32% of executives expect total headcount to increase (versus 38% last quarter).  Thirty-five percent of executives expect lower headcount in the next 12 months.
• Expectations for higher investments deteriorated. Forthy-one percent of executives expect to increase CAPEX (down from 49%  in Q2 2012). Thirty-four percent of executives expect greater R&D expenditures in the next 12 months, compared to 42% in Q2 2012.

Quarterly Report