Survey Indicates Renewed Improvement in Senior Executives' Economic Outlook; Anticipated Growth Driven by Increase in Consumer Confidence, Hiring and Capital Investment

The Corporate Executive Board released results from its quarterly Business Barometer survey, which pointed to several signs of economic improvement in the fundamentals of U.S. businesses. Driven by anticipated increases in consumer confidence, hiring and capital spending, the collective optimism of the more than 400 senior executives who participated in the survey boosted its sentiment index by 1.5 - to 50.6 in Q1 2011 from 48.9 in Q4 2010 - marking the second consecutive quarter of executives' improved economic outlook.

Notably, 82 percent of senior executives expect their firms' revenues to increase, up from 76 percent in Q4 2010, with 50 percent expecting meaningful growth of five percent or more. Additionally, 69 percent of senior executives expect their industries' revenues to grow in the next 12 months (compared to 62 percent in Q4 2010).

One of the most significant improvements in the Q1 Business Barometer was senior executives' sentiment regarding consumer confidence, with 56 percent of senior executives expecting consumer confidence to improve (compared to 39 percent in Q4 2010 and 38 percent in Q3 2010). This quarter's survey also saw a significant improvement in sentiment among executives about their companies' hiring practices, with 58 percent of senior executives expecting overall staff headcount to grow in the next twelve months (compared to 50 percent in Q4 2010).

Additional notable findings from CEB's Q1 2011 Business Barometer include:

-- Growth prospects in the U.S. and E.U. improved dramatically, with 50 percent of executives seeing stronger economic growth in these industrialized economies (compared to 32 percent in Q4 2010 and Q3 2010).

-- The percentage of executives expecting an increase in R&D spending increased to 56 percent, compared to 43 percent in Q4 2010.

-- In the next twelve months, 57 percent of executives expect more M&A deals, up from 53 percent in Q4 2010.

-- Sixty-six percent of surveyed executives expect to introduce a higher number of new products (compared to 53 percent in Q4 2010) and 94 percent expect to maintain or somewhat increase existing capacity levels (compared to 45 percent in Q4 2010).

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