Transcript CEB PPT Template

™
Economic Analysis and
Decision Support Group
22 February 2010
Business Barometer
Aggregate Report
ROAD MAP FOR THE PRESENTATION
Executive Summary
Functional Indicators
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
2
Business Executives’ 12-Month Outlook: Asia
Based on January 2010 CEB
Asia Business Barometer
survey, business executives
have an optimistic 12-month
outlook on the Asian
economies. Most of them
expect higher revenues
coupled, however, with rising
cost pressures.
Asia Business Executives’ Sentiment Index (BESI)* - January 2010
Source: Business Barometer Survey, Corporate Executive Board
55
• 73% of respondents expect revenue in
Asia to be higher in the next 12
months, while 54% of respondents
expect higher cost pressure.
Negative Outlook
Neutral Outlook
0
Positive Outlook
50
100
Business Executives’ Expectations on Revenue Growth and Cost Pressure
Source: Business Barometer Survey, Corporate Executive Board
Much higher, 2%
Much higher, 22%
Higher, 36%
*BESI is a CEB forward looking index
incorporating senior executives’
sentiment on revenue growth and cost
pressures in the next 12 month
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
Higher, 18%
Somewhat higher, 34%
Somewhat higher, 16%
No change, 28%
No change, 13%
N = 64
Somewhat lower, 5%
Much lower, 6%
Somewhat lower, 10%
Lower, 2%
Revenue
Cost Pressure
3
Business Executives’ Assumptions: Asia
Business Executives’
assumptions about economic
conditions in Asia in the next 12
months reflect a high optimism
about growth prospects and an
uncertainty about local
competition, inflation and costs.
Business Executives’ Assumptions on Key Economic Indicators and Drivers
Source: Business Barometer Survey, Corporate Executive Board
Lower
No change
Higher
Energy Costs 2%
• Most respondents expect high growth in
China and other Asian economies.
• 62% of business executives expect higher
consumer spending, while 76% have high
inflationary expectations for the next 12
months.
49%
11%
Local Consumer S pending
10%
Local Inflation 3%
• 53% of respondents expect Renminbi to
appreciate against USD in the next 12
months, while the value of USD will
depreciate against the basket of other major
currencies.
Availability of Qualified Labor
28%
61%
53%
36%
62%
28%
18%
11%
Economic Growth (Asia Exclud. China) 2%
28%
23%
59%
34%
Value Chinese Renminbi Against US D
Local Government Incentives
Economic Growth (China)
49%
47%
13%
Local Competition 5%
• 61% of executives expecting higher local
competition in the next 12 months.
65%
35%
Local Interest Rates 4%
Access To Local Credit*
Value of US D Against Major Crnc.
53%
45%
Major Non-Energy Commodities
25%
58%
67%
22%
67%
31%
76%
21%
20%
56%
24%
* For Access to Credit, "Higher" means "Better"
N = 59
• 53% of executives expect prices of energy
commodities to increase in the next 12
months; 65% of respondents expect nonenergy commodities to increase as well.
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
4
ROAD MAP FOR THE PRESENTATION
Executive Summary
Functional Indicators
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
5
Finance Barometer: Asia
Finance Executive Sentiment Index: Asia
Finance executives’ sentiment
for Asia is optimistic. CFOs
expect to fund organic and
inorganic growth bets as well
as long-term innovation
Source: Business Barometer Survey
59.1
• 58% expect an increase in G&A
budgets.
• Finance chiefs are somewhat
pessimistic in their outlook on the
local lending standards and access to
local credit.
0
50
Negative Outlook
100
Neutral Outlook
Positive Outlook
Sentiment on Finance Indicators
Source: Business Barometer Survey
• 78% of finance executives expect to
increase funding for capital
expenditures, 72% expect to increase
inorganic growth (M&A), and 63%
expect to make long-term innovation
bets.
M uch lower
Volatility in ValueLocal
Currencies Asia
Lower
4%
Lending S tandards Access
Credit
Somewhat lower
14 %
No change
Somewhat higher
29%
9%
19 %
Higher
M uch higher
43%
38%
5% 5%
25%
8%
2%
• Most CFOs expect to spend CAPEX
on manufacturing equipment and
facilities. 31% of surveyed executives
plan to purchase more software, and
29% plan to buy new hardware.
General and Administrative
Expenses
3% 5%
31%
52%
3%
3%
2%
Research & Development
Budget
Numberof M&A Deals in
Asia
Capital Expenditures in
Asia
2 %2 %
33%
4%
46%
23%
7%
53%
14 %
4%
9%
9%
49%
18 %
11%
58%
31%
29%
28%
IT Software
IT Hardware
Vehicles
Economic Analysis and Decision Support Group
N = 58
5%
2%
54%
© 2010 The Corporate Executive Board Company. All Rights Reserved.
9%
Construction of
Facilities
Manufacturing
Equipument
6
Supply Chain & Operations Barometer
Supply Chain & Operations Executives Sentiment Index
Source: Business Barometer Survey
Supply chain and operations
executives are somewhat
cautious. While they are
more optimistic about
introducing new products and
receiving new orders, they
expect higher core input
prices and labor costs.
• Executive sentiment regarding the
development of new products and
SKUs is positive: 69% expect to
introduce more new products.
40.8
0
50
Negative Outlook
Positive Outlook
Sentiment on Supply Chain and Operations Indicators
Source: Business Barometer Survey
M uch lower
• 72% of operations executives are
optimistic about the outlook for new
orders, and 69% expect higher
production levels.
100
Neutral Outlook
Core Input Prices
Introduction New Products
Lower
2%
Somewhat lower
14 %
No change
Somewhat higher
29%
2 %5 %
Higher
M uch higher
43%
24%
9%
53%
4%
15 %
2%
• However, executives are more
pessimistic about input prices and
labor costs: 55% expect higher
core input prices, and 69% expect
higher labor costs.
Total Inventory
18 %
36%
29%
13 %
2%
New Orders
• Only 36% executives anticipate
higher supply chain disruption risk.
N = 56
© 2010 The Corporate Executive Board Company. All Rights Reserved.
4% 4%
Production
2 %4 %
LaborCosts
2%
S upply Chain Disruption
Risk
Economic Analysis and Decision Support Group
4%
Capacity
20%
48%
25%
15 %
45%
30%
59%
7%
16 %
50%
5%
9%
19 %
30%
4%
2%
2% 4%
30%
43%
17 %
6%
7
Sales Barometer
Sales Executives Sentiment Index
Sales executives’ sentiment
is somewhat positive, as they
expect to sell more to new
customers, while keeping or
growing the existing
customer base.
• 61% of sales executives expect
sales to new customers in the next
12 months to increase or remain at
the current level. Further, 60%
believe that sales to existing
customers will increase or remain
the same.
• With higher expectations for sales
to new and existing customers,
only 23% of heads of sales are
optimistic that the average salescycle time will decrease.
Source: Business Barometer Survey
63.1
0
50
Negative Outlook
100
Neutral Outlook
Positive Outlook
Sentiment on Sales Indicators
Source: Business Barometer Survey
M uch lower
S ales New Customers
Lower
Somewhat lower
2 %4 %
No change
31%
Somewhat higher
4 1%
Higher
M uch higher
13 %
7%
2%
S ales Existing Customers
5%
33%
45%
11%
4%
2%
• 25% of sales executives anticipate
an increase in discount incentive
policies.
• 67% of sales executives expect an
increase in sales headcounts.
Avg S ales Cycle
Reliance Discounts
Incentives
S ales Headcount
4% 2%
6%
17 %
51%
8%
6% 2%
26%
62%
26%
23%
48%
13 %
2%
6%
N = 54
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
8
Marketing Barometer
Marketing Executives Sentiment Index
Marketing executives’ outlook
for the next 12 months is
rather optimistic, as they do
not expect negative changes
in budgets and dedicated
advertising resources.
Source: Business Barometer Survey
56.35
• 49% of heads of marketing expect
no change in marketing budgets,
while 40% plan to increase them.
Negative Outlook
• 67% of marketing executives
expect no change in availability of
dedicated advertising resources,
and 17% expect to increase them.
Neutral Outlook
Positive Outlook
Sentiment on Marketing Indicators
Source: Business Barometer Survey
M uch lower
• The outlook for customer loyalty is
rather mixed: while nearly 26% of
marketing executives expect loyalty
to increase, 57% expect the same
level of customer loyalty in the next
12 months.
100
50
0
Marketing Budget Per Rev.
Lower
Somewhat lower
2% 8%
No change
Somewhat higher
49%
Higher
M uch higher
25%
8%
8%
2%
Dedicated Advertising
Agency Employees
4%
10 %
67%
10 %
4% 4%
2%
Customer Loyalty
9%
8%
57%
19 %
6%
2%
N = 53
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
9
Human Resources Barometer
HR executives’ outlook is
rather negative, reflecting
expectations of higher costs,
high employee disengagement
and unwanted turnover.
Human Resources Executives Sentiment Index
Source: Business Barometer Survey
45.71
• HR executives expect significantly
higher employee compensation and
benefits costs (particularly for health
care) over the next 12 months.
• 44% of HR executives believe that
employee engagement will increase.
44% expect unwanted turnover to
rise, as well.
0
50
Negative Outlook
100
Neutral Outlook
Positive Outlook
Sentiment on Human Resources Indicators
Source: Business Barometer Survey
M uch lower
• 51% of HR executives foresee a
higher volume of new hires.
Lower
Unwanted Turnover
Somewhat lower
11%
No change
Somewhat higher
43%
Higher
M uch higher
37%
6%
2%
Average Per Employee Total
Compensation
4%
2%
29%
42%
Average Per Employee
Training S pend
4 %4 %
53%
Employee Engagement
4% 7%
45%
Total Hiring Volume
4%
44%
22%
4%
3 1%
9%
29%
36%
11%
4%
4%
11%
2%
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
N = 54
10
Real Estate Barometer
Real Estate Executives Sentiment Index
Real estate executives
anticipate that the stock of
company-owned real estate
will remain unchanged.
Source: Business Barometer Survey
52
• While 58% of real estate
executives expect higher number of
work spaces, 81% see no change
in the company-owned real estate,
51% expect no change in rented
real estate.
• 50% of real estate executives
expect no change in the vacancy
rates, while 31% believe that
number will increase in the next 12
months.
0
Negative Outlook
50
Neutral Outlook
Positive Outlook
100
Sentiment on Real Estate Indicators
Source: Business Barometer Survey
M uch lower
Num. Work S paces
Real Estate Vacancy Rates
Lower
Somewhat lower
5%
5%
No change
Somewhat higher
37%
14 %
Higher
47%
50%
M uch higher
7%
17 %
5%
12 %
2%
Amount Rented Real Estate
16 %
Amount Company Owned
Real Estate
2 % 5% 2 %
51%
28%
81%
5%
9%
N = 53
Economic Analysis and Decision Support Group
© 2010 The Corporate Executive Board Company. All Rights Reserved.
11
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Economic Analysis and
Decision Support Group
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Shehryar Ansari
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Consultant
Director
Director
Director
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