Business Leaders Outlook 2018
The 2018 Business Leaders Outlook gives insight into the current business environment and the challenges facing middle market companies. Executives report increased optimism and growth expectations for 2018, bolstered by strong global and national economies, lower corporate taxes and regulatory reform.

2018 Business Leaders Outlook

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Optimism Hits New Highs

Middle market executives are overwhelmingly upbeat about the economy and their own companies for the year ahead. Nearly 1,700 executives completed our annual Business Leaders Outlook survey in January, expressing the highest levels of optimism in its eight-year history.

The combination of a strong economy, regulatory reform and tax cuts is bolstering business leaders’ positive outlook. More executives are expecting to earn higher profits and hire extra workers. But many also are increasingly concerned over finding the talent they’ll need as experienced workers retire.

ECONOMIC OUTLOOK FOR 2018

Optimistic Neutral Pessimistic
69 % 39 ppts Global economy 2014 2015 2016 2017 2018 2% 29% 69%
89 % 9 ppts National economy 2014 2015 2016 2017 2018 1% 10% 89%
75 % 7 ppts Local economy 2014 2015 2016 2017 2018 4% 21% 75%
69 % 4 ppts Industry performance 2014 2015 2016 2017 2018 5% 26% 69%
85 % 1 ppt Company performance 2014 2015 2016 2017 2018 2% 13% 85%
▲ This arrow compares year-over-year figures
Quotation marks

With the sense of excitement we’re hearing from businesses, it’s no surprise that executives are focused on growth.”

John Simmons, Head of Middle Market Banking & Specialized Industries, Commercial Banking

TAX REFORM

Our survey began just 11 days after the federal tax overhaul was signed into law on December 22, 2017, cutting taxes on individual incomes and slashing the corporate tax rate to 21 percent.

Expected
Benefit

Regional Outlook

Industry Outlook

Plans for Tax Savings

Quotation marks

This trending positivity is confirmation that something real is happening in the economy. Business optimism translates to business activity, which is why we’re seeing increased expectations across the board. For businesses that can hire and retain talent in today’s tight labor market, there are growth opportunities to capitalize on.”

Jim Glassman, Head Economist, Commercial Banking

REGULATORY REFORM

Reflecting a more constructive regulatory environment over the past year, just 27 percent of executives feel that regulations make it more difficult for their businesses to grow—a drop of nearly 30 percentage points from last year’s survey.

Where
Government
Should Focus

Concerns
Over Regulations

▲▼ These arrows compare year-over-year figures
Quotation marks

A more business-friendly regulatory environment is a double-edged sword for American companies. It makes it easier for US firms to operate, but it also makes the US more attractive to foreign companies who are eager to compete in our home markets.”

Morgan McGrath, Head of International Banking, Commercial Banking

TOP BUSINESS CHALLENGES

While executives continue to rank revenue/sales growth as their top challenge, it’s down compared to last year. However, staffing concerns—the talent shortage and labor costs—have gone up.

63%

Revenue/sales growth
 8 ppts
32%

US competition
 4 ppts
54%

Limited supply of talent
 10 ppts
25%

Cost of commodities
 6 ppts
50%

Managing labor costs
 4 ppts
23%

Regulatory requirements
 10 ppts
▲▼ These arrows compare year-over-year figures

HIRING AND TALENT CONCERNS

As personnel needs are felt more acutely to support anticipated growth, more executives indicate that it’s getting harder to find the right job candidates.

Hiring and
Compensation Plans

A Talent Gap

Hardest Positions
to Hire

Industry
Hiring Challenges

How Companies
Are Adapting

▲▼ These arrows compare year-over-year figures
Quotation marks

The talent shortage companies are reporting is what you’d expect to see as unemployment continues to come down.”

Jim Glassman, Head Economist, Commercial Banking

INTERNATIONAL OUTLOOK

In a dramatic upswing, 69 percent of executives are optimistic about the global economy—more than double last year’s respondents (30 percent).

International Business Activity

Plans for
Foreign Earnings

International Concerns

Quotation marks

We are now in the second year of synchronized global economic growth. Our clients are more optimistic about the future, as reflected in improved consumer sentiment and growth in capital expenditures globally. That's why we expect them to continue to invest overseas, both organically and opportunistically.”

Morgan McGrath, Head of International Banking, Commercial Banking

ABOUT THE SURVEY

In its eighth year, the Business Leaders Outlook survey* provides a snapshot of the current business environment, the trends influencing that environment and the decision-making of the executives who operate in it.

The results are based on the responses of 1,685 C-suite executives from middle market companies in various industries across the country. This year’s survey was conducted from January 2 to 19, 2018.

Who took the survey 17% Owner 11% President 5% Other 39% CFO 28% CEO/Chair
Where companies are based 16 % Northeast 16% West 35% South 33% Midwest

Company size by number of employees

14%
1 to 49
15%
50 to 99
26%
100 to 249
18%
250 to 499
13%
500 to 999
12%
1,000 to 4,999
2%
5,000+
*The results of this online survey are within statistical parameters for validity, and the error rate is plus or minus 2.35 percent at the 95 percent confidence interval.

OUR EXPERTS

John Simmons

JOHN SIMMONS

Head of Middle Market Banking
& Specialized Industries
Commercial Banking
JIM GLASSMAN

JIM GLASSMAN

Head Economist
Commercial Banking
MORGAN MCGRATH

MORGAN MCGRATH

Head of International Banking
Commercial Banking
Outlook
Employment

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