Middle-market CEOs are feeling better about the current business climate and less fearful the economy will fall into recession, according to the latest CEO Survey from Hofstra University’s Frank G. Zarb School of Business and New York-based IPA 100 firm Marcum LLP (FY21 net revenue of $799.1 million). However, while significantly fewer of the 265 CEOs polled in February (33%) said they are “very concerned” about a recession in the coming year – down from 47% in the November 2022 Marcum-Hofstra survey and 55% in September – more say they are “somewhat concerned” about the prospect of recession now (54% currently as compared to 43% in November).
Those respondents with a positive overall outlook on the business environment rose to 84% from 80% in November. Meanwhile, the weighted average on a scale of one to 10 continued to hover in the mid-range, advancing to 6.6 from 6.4 in November, but down from the 6.7 recorded in September. CEOs in the food, beverage and hospitality (64%) and technology (47%) industries were the most optimistic, while their counterparts in construction were less upbeat. Among all survey participants, the three most important influences for business planning were “economic concerns,” “availability of talent” and “rising material/operational costs.”
“The overall optimism we see in this survey is very encouraging,” says Marcum chairman and CEO Jeffrey Weiner. “Now that the pandemic economy is behind us and companies have resumed full operation, CEOs are challenged to meet higher expectations from customers, who are also working hard to make up lost ground, while continuing to reinvest in the business.”
Other areas of note from the survey include:
Succession planning: Seventy-nine percent of CEOs indicated that their companies have a succession plan in place, but only 45% are “very confident” in their plan and 3% are not at all confident. Among those without a succession plan, 41% said it is not a priority for their companies, while 29% said they don’t know how to approach developing one and 27% said “the business will take care of itself when the time comes.”
Customer expectations: More than half of CEOs (58%) say their customers or clients are more demanding and have higher expectations than the past year.
Artificial intelligence: About a quarter of CEOs surveyed (26%) indicated their companies have begun to utilize AI tools in their operations, and almost half (47%) are exploring how AI tools could be used. Only one in 10 do not envision their company utilizing AI tools. Those companies using AI tools are employing them for process improvements, business planning and customer service, among other uses.