Further results from Inc's survey of Inc 500 CEOs on the economy.
Business, while not exactly booming, is at least picking up, according to the 179 Inc 500 CEOs surveyed for Inc's most recent quarterly study on the state of the entrepreneurial economy. Here Inc.com offers additional data from the survey on sales, hiring, and cash flow as well as the panel's best guesses on when to expect an economic recovery.
These Inc 500 CEOs have started to see signs that the economy is on the road to recovery, with 57% reporting an increase in sales in the first quarter of 2002 versus the last quarter of 2001.
Please compare your estimated sales from the first quarter of 2002 (January - March) to sales in the prior quarter (ended December 2001).
Sales up more than 10% compared to last quarter: 42%
Sales up less than 10%: 15%
Sales flat: 26%
Sales down more than 10%: 16%
Sales down less than 10%: 2%
While many still CEOs are still struggling -- as indicated by the 44% with flat or declining sales over the past quarter -- others are planning to take steps toward renewed growth by hiring additional staff. Only 6% of respondents predicted more layoffs for 2002.
What changes are you forecasting in your staffing levels in 2002 over 2001?
Increase staff more than 10% this year: 45%
Increase staff less than 10%: 27%
No change in staff: 21%
Decrease staff more than 10%: 4%
Decrease staff less than 10%: 2%
Despite a challenging year, most CEOs have preserved their relationships with their bankers. But -- not surprisingly -- as customers throughout the economy stretch out their payables, cash flow has suffered at nearly 30% of the companies surveyed.
How would you describe your relationship with your bank right now?
How would you characterize your current cash-flow situation?
Normal -- I'm paying my bills on time without a problem: 70%
Tight -- Clients are stringing me along: 28%
Dire -- I'm not sure how I'm going to make payroll: 2%
As they start to see things stabilize or improve slightly at their companies, Inc's panelists predict that the recession is winding down. Of those who do think the economy is in recession, 75% think it will be over within a year.
Do you think we're currently in a recession?
If you do think we're in a recession, how long do you think it will last?
Three months: 26%
Six months: 35%
Nine months: 14%
One year: 19%
Two years: 5%
Note: Numbers may not add to 100% due to rounding.