MOUNTAIN VIEW, CA--(Marketwire - October 18, 2010) - Despite indications of economic stabilization, a combination of heightened unemployment concerns, continued expectations for a "double-dip" recovery, and high levels of economic uncertainty have dampened optimism by finance professionals. These results are part of the findings of a quarterly poll of financial executives conducted in September 2010 by Adaptive Planning and the Business Performance Innovation Network.
The Q3 2010 Business Volatility and Variables Survey revealed that 41 percent predict a "W-shaped" recovery, similar to last quarter's 46 percent. Nearly all finance executives (99 percent) expect meaningful jobs growth will not occur until next year or beyond. Respondents have pushed back their expectations for the timing of this jobs recovery, with 38 percent expecting jobs growth will not occur until 2012 -- two quarters later than the previous survey. Moreover, finance executives consider unemployment to be the single greatest concern for the overall US economy, with 68 percent citing it among the top challenges.
The majority view current economic conditions as the same (46 percent) or better (30 percent) than they were six months ago; however, only 36 percent of financial executives believe economic conditions will improve over the next six months. This marks the third consecutive quarter in which optimism has declined relative to the previous quarter. Similar to the last survey, which was the highest "negative" reading since March 2009, 20 percent expect that the economy will be in worse condition in six months.
"Despite consecutive quarters of economic stabilization, unemployment concerns continue to significantly impact the expectations of a high percentage of finance executives," said William A. Soward, CEO of Adaptive Planning. "We have seen a steady erosion of optimism and continuously high levels of economic uncertainty in recent polls. This is particularly concerning, because even if their expectations do not come to pass, the sentiment of finance executives undeniably affects company outlook, forecasts, and decision making."
Respondents from small companies have a more pessimistic outlook than those from larger companies. Twenty-four percent from small companies expect conditions to worsen over the next six months, compared to only 18 percent from midsized or large companies.
There were also differences in outlook across industry sectors. In particular, consumer-led industries, such as consumer goods, travel and hospitality, and retail and wholesale trade, were more optimistic about the future than the overall average. Non-consumer -led industries, such as business services, construction, and nonprofit and government, were more pessimistic than average. Respondents from the healthcare industry were most pessimistic, with 34 percent expecting conditions to deteriorate over the next six months.
One bright spot is that the company-specific outlook for jobs growth over the next six months is slightly more optimistic than the predictions for the broader economy, with more respondents expecting jobs growth at their own companies (26 percent) versus jobs losses (23 percent).
The economic outlook continues to be highly uncertain, with 53 percent of finance executives reporting high or very high levels of uncertainty. This uncertainty has remained extremely high since Q1 2009, and continues to drive more frequent re-forecasting and scenario planning. Fifty-six percent expect to increase the frequency of their re-planning and what-if analysis next quarter.
The top concerns of finance executives for their own companies remain consistent with prior surveys. Demand for products and services, credit and financial market stability, and unemployment remain the top concerns for the next six months, with healthcare reform and Euro zone concerns falling since the last survey.
The online poll surveyed financial professionals from companies in over twenty industries and ranging in size from under $10 million to over $1 billion in revenues. This is the seventh quarterly poll examining perspectives on key economic conditions, individual company performance, and the role of planning and forecasting in the current economic downturn.
The Business Volatility and Variables Survey is conducted once per quarter, with results tallied against those of previous quarters to identify trends in overall economic conditions and planning practices. For more information on the summary report of the findings, visit: http://www.adaptiveplanning.com/docs/Business_Variables_and_Volatility_Q3-2010_FINAL.pdf.
About the BPI Network
The Business Performance Innovation (BPI) Network is an influential group of senior-level executives driving transformation, process re-invention, organizational innovation, lean operation, and competitive adaptability in multi-national enterprises worldwide. Members of this change-centered affinity network represent companies with combined annual revenues of more than $1 trillion. The aim is to share thinking and advance best practices in how enterprises can "transform to better perform" as they seek to tap more complex, cost-sensitive, growth markets with large, diverse and evolving consumer and infrastructure needs. More information is available at: www.BPINetwork.org.
About Adaptive Planning
Adaptive Planning is the worldwide leader in on-demand financial planning and reporting solutions that improve operational efficiency, strengthen companywide collaboration, and drive better business decisions in companies of all sizes. Adaptive Planning makes it easy to move beyond spreadsheets and automate budgeting, forecasting, reporting, and "what-if" analysis, without the cost and complexity associated with traditional business intelligence and BPM software. With free software, free trials, and both on-demand and on-premise deployment options, Adaptive Planning is the fastest and easiest way for finance organizations to enhance their agility and strategic value. Adaptive Planning is headquartered in Mountain View, Calif. and can be reached at 650-528-7500 or www.adaptiveplanning.com.
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