Economic recovery: wishing and hoping? - Front Lines - Brief Article

Chief Executive, The, May, 2002

Although Alan Greenspan pronounced the recession over and the U.S. economy on the rebound back in March, the real question is how steep the climb back up will be and how long it will take. Business executives surveyed by New Hampshire-based NFI Research shortly after Greenspan's pronouncement were mostly in agreement with the Fed chief, and some were quite optimistic about their own company's response. Nearly all of the executives surveyed believe that the economy will regain strength over the next 12 months, and a vast majority believes that their organizations will improve at the same pace or more quickly.

A few respondents wrote that, barring additional terrorist attacks, the U.S. economy will begin to realize significant economic growth toward the end of the year. Of respondents, 98.3 percent believe that the economy will regain at least a small amount of strength during the next 12 months, 76.7 percent believe the economy will regain at least a medium amount of strength, and 16.4 percent believe the economy will regain significant strength.

When speaking about their own company's rate of recovery, 83.2 percent of respondents say they will improve at the same pace or more quickly than the economy, 51.7 percent believe their company will improve at least slightly more quickly, and 16.4 percent say their company will improve significantly more quickly.

Other respondents note that, due to the nature of their organizations (e.g., construction, manufacturing), improvement is expected to lag behind economic improvement in general. One respondent's organization used the economic "downtime" as an opportunity to reassess its positions and objectives.

NFI RESEARCH FINDINGS

"How much strength do you believe the economy will regain
over the next 12 months?"

A SIGNIFICANT AMOUNT   16.4%
A MEDIUM AMOUNT        60.3%
A SMALL AMOUNT         21.6%
NONE/NO CHANGE          0.4%
IT WILL LOSE STRENGTH   1.3%

[C]Net Future Institute

Note: Table made from bar graph
"Presuming the economy improves over the next 12 months, I feel my
organization will improve":

SIGNIFICANTLY MORE QUICKLY  16.4%
SLIGHTLY MORE QUICKLY       35.3%
AT THE SAME PACE            31.5%
SLIGHTLY LESS QUICKLY       14.2%
SIGNIFICANTLY LESS QUICKLY   2.6%

[C]Net Future Institute

Note: Table made from bar graph