The Optimism Economy
We’re finally seeing the first green shoots of optimism among middle-market CEOs. On a scale of 1-10, more than 42% of business leaders responding to the latest Marcum-Hofstra CEO Survey (conducted in April and released this week) rated their business outlook in the highest range of 8-10. That is up from 36.5% just since February. And those giving their outlook a square-on “10” nearly doubled, to 16% from 8.9%.
The results speak to the resiliency and entrepreneurial spirit that drive the middle market. Of course, some sectors are more optimistic than others. It’s not your imagination that there are cranes and jackhammers seemingly everywhere. That’s making construction CEOs pretty happy, with 40% giving a thumbs up at “10,” compared to just 9% in February. CEOs in financial services and financial institutions, professional services, real estate, and healthcare also reported a positive outlook.
But there’s still pain in some sectors—retail and consumer products, manufacturing and distribution, technology and government/nonprofit education—where optimism slipped slightly.
Overall, we see these findings as a positive indicator. Even with CEOs reporting that they are dealing with higher energy costs, cybersecurity threats, and challenges in finding talent, they’re starting to see light at the end of the tunnel.
With economic concerns affecting business planning for virtually all companies, business leaders need to take a very close look at reining in costs where they can—fuel being a big one—to find efficiencies in other areas.
The low-hanging fruit for many will be improving operations, transitioning to digital tools, and streamlining inventory management and supply chain practices. But they will also need to look outside of the usual places, while taking care not to pare back where it can do damage. For example, cost-cutting in areas such as talent and marketing will work against you if your company wants to position itself for growth.
Many survey respondents told us they are already beefing up their benefits and compensation plans and investing in their culture to win the war for talent. (My favorite response: “Cookies. Cupcakes. Extra pay. PTO.”)
What also came through loud and clear is the need to batten down the hatches on cybersecurity. With war raging in Ukraine, cyber-attacks are a very real threat, and 91% of CEOs are concerned about their companies’ vulnerability. As most leaders realize, one click on a rogue link by a distracted team member is all it takes to put a company in a world of pain, one that can be very costly to get out of. It was no surprise that nearly 100% of respondents reported they are increasing their investments in cybersecurity now or plan to do so.
If you haven’t taken a look at your cybersecurity practices in a while, seriously consider a third-party vulnerability assessment to make sure there are no gaps. Threats are increasing so quickly that even the best internal cybersecurity teams are stretched thin and can benefit from an objective perspective. Let your Marcum professional know if you need help, and we can connect you with our cybersecurity advisory team.
We are feeling optimistic here at Marcum, too. Many of us in the accounting field were operating with one hand tied behind our backs during the many challenges of the past two years, but now it’s time to sprint ahead.
In fact, we anticipate a period of rapid growth for Marcum in the coming months. Just this week we announced a planned merger with Friedman LLP, ranked the 33rd largest accounting firm in the country, which we expect to conclude this summer. Friedman is a long-established, highly admired New York City firm with offices throughout the Northeast. Their talent, practice strengths and client-centric philosophy are highly compatible with ours, and the combination of our firms will bring many more opportunities to help you address your business and personal needs in a rapidly changing environment.
Look for additional news from Marcum in the weeks ahead.
For now, happy Asian American and Pacific Islander Heritage Month!
And I’d be remiss without acknowledging Mother’s Day on Sunday. Happy Mother’s Day.
Wishing you all a wonderful weekend.