Situation: A CEO is planning for 2015-16. While the economy seems to be picking up, there are clouds on the horizon. Do you believe the positive indicators? How do business prospects look for 2015-16?
Advice from the CEOs:
- Company A: Based on our pipeline we should be recruiting heavily. However we are being conservative and are only adding personnel selectively.
- Company B: We expect 2015 to be modestly better than the last few years. Engineering saw a turnaround this summer; however we need to see signs that this early economic cycle work spreads more broadly to the rest of the economy.
- Company C: Some of our development work looks like a spike due to delayed projects. This may not be sustainable.
- Company D: Weakness in Europe and the recent announcement that Japan has entered another recession give us caution about international prospects.
- Increasing numbers of Baby-Boomers are retiring. However, some statistics suggest that 60% of retired boomers will be living on Social Security, meaning that they will struggle to make ends meet. This could create a negative shift in consumer spending.
- The current stock market rally is based on the higher profitability of large public companies. This has come about as a result of two factors: recessionary cutbacks and easy money from the Federal Reserve. What we may be seeing is a Fed–funded bubble. There is a question of its sustainability.
- Implications for business:
- For companies doing business internationally – the lower dollar helps.
- Cautious additions to employment/investment.
- Need to deal with inflation if the recovery accelerates.
- If and when the recovery accelerates, employee retention may become a challenge.