quarter 1, 2018 - lea global...technology – 27 ceos (11.16%) most selected by...
TRANSCRIPT
Welcome to the inaugural Marcum CEO Survey, a quarterly gauge of middle-market CEOs’ outlook on the current business environment and their priorities for the next 12 months. The Marcum CEO Survey is a companion to Chief Executive Group’s CEO Confidence Index.
CEO SURVEYQUARTER 1, 2018
marcumllp.com/ceosurvey
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 1
8%
19
46
85
57
23
9
19%
35%
24%
10%
4%
110
10
20
30
40
50
60
70
80
90
109876543
0 0
21
PositiveNegative
What is your view of the current business environment on a
1-10 scale?
QUESTION
Industries giving an 8 rating to their outlook of the current business environment:
Construction
Financial Services
High Tech
Manufacturing (industrial goods)
Manufacturing (consumer goods)
Real Estate
Retail
Wholesale/Distribution
CEOs across all 16 industry sectors are optimistic about the current business environment. 99% rated their business outlook between 5 (positive) and 10 (very positive).
8% of CEOs rated their business outlook a “10.”
Half of the industry sectors surveyed most frequently rated their business outlook an “8.”
KEY FINDINGS
* The CEO Confidence Index is America’s largest monthly survey of chief executives, compiled by Chief Executive Group and published
on ChiefExecutive.net and in each issue of Chief Executive magazine. The Marcum CEO Survey is conducted in collaboration with Chief
Executive Group.
INDEX: A Weighted Average
of CEO Responses
7.77Marcum CEO Survey – Quarter 1, 2018
7.09CEO Confidence Index – Quarter 4, 2017
6.49CEO Confidence Index – Quarter 1, 2017
Marcum’s CEO Survey for the first quarter of 2018 found an improvement in CEOs’ outlook on the current business
environment, as compared to the findings of Chief Executive Group’s CEO Confidence Index* in the prior
quarter and one year ago.
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 2
cont’dWhat is your view of the current business environment on a 1-10 scale?
CEOs in 11 industry categories* will invest in technology.
CEOs in 10 industry categories* say talent recruitment will be their highest priority.
CEOs in 6 industry categories* will invest in workforce training.
CEOs in 3 industry categories will invest in mergers and acquisitions.
CEOs in 2 industry categories will invest in research and development.
CEOs in 2 industry categories will invest in geographic expansion.
All three top priorities selected by CEOs in 2 industry categories related to human capital.
* Includes “Other”
KEY FINDINGSOver the next 12 months, in which ways do you plan to invest in your company? Please select 3 and rank them in order of priority, 1 being the most important.
QUESTION
5246
32 3025
18 179
20
10
20
30
40
50
60
Technology Workforcetraining
R&D Equipment Talentrecruitment
Geographicexpansion
Mergers &acquisi�ons
Physicalplant
expansion
I do not planto invest
PRIORITY 2
86
35 28 22 20 16 14 124
0
20
40
60
80
100
Talentrecruitment
Technology Workforcetraining
Mergers &acquisi�ons
R&D Equipment Physicalplant
expansion
Geographicexpansion
I do not planto invest
PRIORITY 1
4336 36
3022
18 15 13 9
0
10
20
30
40
50
Technology Talentrecruitment
Workforcetraining
Mergers &acquisi�ons
Geographicexpansion
I do not planto invest
Equipment R&D Physicalplant
expansion
PRIORITY 3
(36%)
(23%)
(19%)
(16%) (16%)
(14%)
(10%)(8%)
(7%) (6%)(4%)
(20%)
(14%) (13%)(11%)
(8%) (7%)
(4%)
(1%)
(15%)(12%)
(9%) (8%) (7%) (6%) (5%)(2%)
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 3
TALENT RECRUITMENT86 CEOs (36%)
#1 PRIORITY INVESTMENT (Top 3 Answers)Top industries selecting each answer
Manufacturing (industrial goods)
30%
Professional Services and Other
9%
High Tech/Telecomm/IT
13%
TECHNOLOGY35 CEOs (15%)
Manufacturing (industrial goods)
26%
Other11%
Financial Services
20%
WORKFORCE TRAINING28 CEOs (12%)
Manufacturing (industrial goods)
39%
Construction/Engineering/MiningHealthcareWholesale/DistributionOther7%
Manufacturing (consumer goods) and
Professional Services
11%
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 4
cont’dOver the next 12 months, in which ways do you plan to invest in your company? Please select 3 and rank them in order of priority, 1 being the most important.
#1#2
#3TALENT
RECRUITMENT
WORKFORCE TRAININGTECHNOLOGY
TALENT RECRUITMENT
TALENT RECRUITMENT
TALENT RECRUITMENT
TALENT RECRUITMENT
WORKFORCE TRAINING
TECHNOLOGY
TECHNOLOGY
TECHNOLOGY
R&D
EQUIPMENT/WORKFORCE
TRAINING
TECHNOLOGY
TECHNOLOGY
MERGERS & ACQUISITIONS
M&A/TECHNOLOGY
TALENT RECRUITMENT
CONSTRUCTION/ENGINEERING/MINING
FINANCIAL SERVICES
HEALTHCARE
HIGH TECHNOLOGY
MANUFACTURING (INDUSTRIAL GOODS)
MANUFACTURING (CONSUMER GOODS)
INDUSTRY SPOTLIGHTPriority investments for the next 12 months
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 5
cont’dOver the next 12 months, in which ways do you plan to invest in your company? Please select 3 and rank them in order of priority, 1 being the most important.
QUESTIONWhat is the single most important influence for your business planning for the next 12 months?
Other key influences appear to be industry-specific. The next five prevailing influences were very similar in importance.
Technology – 27 CEOs (11.16%)
Most selected by Manufacturing-industrial goods (6) and Financial Services (5)
Access to capital – 27 CEOs (11.16%)
Most selected by High Tech (10)
Other – 27 CEOs (11.16%)
Most selected by Professional Services (8) and Manufacturing-consumer goods (5)
Labor – 25 CEOs (10.33%)
Most selected by Manufacturing-industrial goods (11)
Regulatory environment – 24 CEOs (9.92%)
Most selected by Manufacturing-industrial goods (6) and Financial Services (5)
KEY FINDINGS
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 6
11% 11% 11% 10% 10%
5%5%
4%
2%
27
74
27 27 25 24
13 11 95
0
10
20
30
40
50
60
70
80
31%Availability of talent (31%) was the leading answer by nearly three times the next nearest answer. The urgent need for access to talent is industry-agnostic, with CEOs in 14 of 16 industry categories saying this is the most important influence for their companies’ near-term future. This is an encouraging economic sign with implications for hiring, wage growth, worker training, and other financial and operational considerations.
INDUSTRY SPOTLIGHTMost important business planning influence
AVAILABILITY OF TALENT
(60%)
CONSTRUCTION/ENGINEERING/
MININGTECHNOLOGY/REGULATORY
ENVIRONMENT (28% each)
FINANCIAL SERVICES
ACCESS TO CAPITAL/AVAILABILITY OF TALENT/
TECHNOLOGY/INDUSTRY
CONSOLIDATION (18% each)
HEALTHCARE
ACCESS TO CAPITAL (40%)
HIGH TECHNOLOGY
OTHER (24%)
AVAILABILITY OF TALENT (36%)
MANUFACTURING (CONSUMER GOODS)
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 7
MANUFACTURING (INDUSTRIAL GOODS)
cont’dWhat is the single most important influence for your business planning for the next 12 months?
CEOs’ view of the importance of diversification to their companies’ future parallels their overall outlook on the current business environment.
90% of CEOs rated diversification between 5 (important) and 10 (very important).
Most CEOs answered 8 (21.9%) or 7 (19.8%).
Only 23 CEOs out of 237 (9.7%) said diversification is not important to their future.
KEY FINDINGS
3733
5247
29
16
10553
0
10
20
30
40
50
10987654321
PRODUCT/SERVICEDIVERSIFICATION
Very ImportantNot Important
15.61%
13.92%
21.94%
19.83%
12.24%
6.75%
4.22%
2.11%2.11%1.27%
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 8
How important is product/ service diversification to your company’s future,
on a 1-10 scale?
QUESTION
cont’dHow important is product/service diversification to your company’s future, on a 1-10 scale?
INDUSTRY SPOTLIGHTImportance of diversification on a scale of 1-10
Most frequent answer by selected industries
HIGH TECHNOLOGY
10 (24%)
HEALTHCARE6
(27%)
CONSTRUCTION9/8/7
(21% each)
FINANCIAL SERVICES
4/6/8(22% each)
MANUFACTURING (INDUSTRIAL GOODS)
8 (24%)
MANUFACTURING (CONSUMER GOODS)
7(30%)
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 9
CEO INSIGHTS
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 10
“The labor pool is very tight. This is putting pressure on wages and consumer prices.”
“We're having to change our work environment to make it more attractive to a more youthful workforce.”
“The strength of the economy will carry forward earnings growth. However, there are new regulations in the financial industry coming from states and federal agencies that leave us with questions about what future growth looks like.”
Dave Wickersham, CEOThe Leaders Group, Inc.
“Leveraging the macro tailwinds of big data, personalization, customization and e-commerce are critical to our growth plans.”
Michael Araten, CEOSterling Drive Ventures & The Rodon Group
“It has become increasingly difficult to find applicants for production and entry level positions in our geographic location.”
“Scaling up without a technology backbone is a recipe for disaster. Also, the new disruptive technology is making earlier practices obsolete in the short span.”
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 11
“We need to scale ahead of our opportunity since it takes a significant period of time to bring new talent on board and adjust to our culture.”
“Digital disruption of services continues to accelerate. It causes headaches and opportunity.”
“Everything is in play. All aspects of my industry are consolidating in unique and creative ways.”
“Increased regulations are creating significant barriers to entry.”
“We've seen our suppliers consolidate heavily over the last few years. We’ve seen our suppliers go from 8 to basically 4 today.”CEO INSIGHTS
“Successful expansion and performance, given the business has an effective infrastructure, is dependent on productive labor.”
“Given that the world is transitioning to mobile marketing and predictive analytics, we need to be there, too.”
Robert M. Donnelly, CMOFlo-Tite Valves & Controls
“Our business model is not based on growth but is based on innovation and continued profitability.”
Roger Cederholm, CEOMartin Automatic, Inc.
“We need to use our existing technology, as well as additional tech (software) to transition our business to the 'Amazon Economy' - small package vs. truck-load shipments, B2B and B2C platforms.”
34
24
31
40
35
35
20
9
14
14%
10%
13%
17%
14%
14%
8%
4%
6%
0 5 10 15 20 25 30 35 40 45
<$5 M
$5 M to $9.9 M
$10 M - $24.9M
$25 M to $49.9M
$50 M to $99.9M
$100 M to$249.9 M
$250 M to$499.9 M
$500 M to$999.9 M
> $1 Billion
Which of the following best describes your company's industry
DEMOGRAPHICS
75
25
22
21
19
18
15
11
10
6
5
5
3
2
2
1
1
31%
10%
9%
9%
8%
7%
6%
5%
4%
2%
2%
2%
1%
1%
1%
0%
0%
0 10 20 30 40 50 60 70 80
Manufacturing (Industrial Goods)
High Tech/Telecommunica�ons/Informa�on Technology
Other (please specify)
Manufacturing (Consumer Goods)
Professional Services (Legal, Consul�ng, Accoun�ng,…)
Financial Services (Banking, Insurance, Brokerage,…)
Construc�on/Engineering/Mining
Health Care (Providers and Payers)
Wholesale/Distribu�on
Retail Trade
Real Estate
Adver�sing/Marke�ng/PR/Media/Entertainment
Pharmaceu�cals & Medical Products
Government and Non-Profit
Transporta�on (Airlines, Trucking, Rail, Shipping,…)
Energy/U�lity
Travel and Leisure (Hotels)Which of the following best describes your company's industry?
100% = 241 100% = 242
In which revenue size range was your company last year?
MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 12
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