Privately-held companies have not been this upbeat on the US economy in years.

Talent shortfalls are emerging as potentially significant

Trendsetter Barometer® business outlook

Key findings in Q3

CEOs and CFOs of privately-held companies believe US economic momentum is improving. A net 75% are optimistic about the US economy, a 12-year high in PwC’s Trendsetter Barometer quarterly survey. Panelists are now projecting higher revenue growth at an average of 7.2% over the next year, up from 6.8% in the second quarter.

Yet worries over the available talent pool are also rising. In their view, a lack of qualified workers is the biggest threat to business growth after policy unknowns. With the US economy hovering near full employment, the findings suggest that companies which fail to tackle perceived shortcomings in the talent pool will struggle to fully partake in the expected upward turn in US growth. Some panelists say this is already happening: “Small companies are doing intensive technology boot camps to get better employees,” a CEO from a staffing services firm told us. “Software companies are not hiring, because there is a shortage of people with skills.”

According to hiring intentions, the average workforce among panelists will expand by 3.5% over the next year, up from the 1.2% planned expansion expected a year ago. Some companies are taking action to make sure they can fully staff and meet demand. Their initiatives show how some of the conditions that affect the talent pool available to companies may change in the months ahead:

Higher wages Trendsetter panelists are now projecting an average 3.39% increase in hourly wages for their workforces over the next 12 months, the highest rate of increase since the recession and well above the tepid 2.5% pace in US wage growth over the last several months.

Economists have been confounded by the lack of wage growth as the job market tightens. However, panelists’ outlook for wages has been a good predictor of annual growth in US employment costs overall.  As a result, we expect private companies are likely to prepare to adjust expectations around wage costs and consider more investment in employee training to attract new hires.

Wider adoption of technology 34% of panelists are planning to increase budget for information technology (IT) over the next 12 months, up from 27% a year ago. This remains a top spending area for services companies, with 47% expecting to raise IT spend. We expect some of the increase will funnel toward labor-saving automation technologies as companies look for alternatives in a tight labor market. Yet, IT investments also change employee requirements and, potentially, wage profiles. Tech jobs are experiencing fast pay growth, according to Glassdoor, an online jobs search and review company. Wages for solutions architects and web designers rose 3.7% and 3.4% in September on the year, respectively.

Find the complete picture on private company growth outlooks and performance by navigating through the tabs below. 

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About the survey

PwC’s Trendsetter Barometer is a quarterly survey of CEOs and CFOs of privately-held companies, is now in its 21st year. Panelists’ views have served as a good leading economic indicator on where US GDP growth is likely to be in a year’s time and whether employment numbers will rise or fall, our analysis of the data show. Third quarter 2017 results reflect the views of 300 CEOs/CFOs interviewed between July 5 and September 29, 2017, representing a cross-sector profile of US privately-held firms with average annual enterprise revenue of $349 million. 

*PwC calculates net economic sentiment as the balance of panelists who are “optimistic” minus those who are “pessimistic” about how they feel about the US economy over the next 12 months. We exclude “uncertain” responses.

Contact us

Shawn Panson
Private Company Services, Leader
Tel: +1 (973) 236 5677
Email

Ken Esch
Private Company Services, Trendsetter Barometer Leader
Tel: +1 (312) 298 3419
Email

Margaret Young
Private Company Services, East Region Leader
Tel: +1 (864) 577 8816
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