Download Trendsetter barometer® 20 years at a glance What’s inside:

Trendsetter barometer®
20 years at a glance
September 2015
What’s inside:
Will US GDP rise a year from now?
Peering into the payroll future
Wage oracle
Ahead of the borrowing curve
On the same pricing page
Revenue forecasts for Trendsetter
companies outstrip GDP projections
Emerging markets: Reliable
revenue growth
Will US GDP rise a year from now?
Trendsetter companies’ optimism/pessimism about the US economy has often been a good leading indicator
of where US GDP will head a year later.
US GDP year-over-year
% of Trendsetter companies optimistic
about the US economy
10%
100%
8%
80%
60%
6%
40%
4%
20%
2%
0%
0%
-20%
-2%
-40%
Trendsetter economic sentiment
foretold the Great Recession
and subsequent recovery.
-4%
-60%
-80%
-6%
-100%
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: PwC’s Trendsetter Barometer quarterly survey question: "Looking ahead over the next 12 months, how optimistic or pessimistic do you feel about the US economy?"
Oxford Economics / Haver Analytics
The numbers in the right Y-axis are the percentage of Trendsetter respondents answering “optimistic” minus the percentage answering “pessimistic.”
Wage oracle
If Trendsetter private companies say they'll raise wages in the next year, chances are you'll see similar
movement at US companies generally.
Trendsetter companies’ mean expected
hourly-wage increase in next 12 months
US employment cost index – wages &
salaries of private-industry workers
4.5%
6%
4.0%
5%
3.5%
3.0%
4%
2.5%
3%
2.0%
1.5%
2%
Trendsetter companies foretold the
plunging rate of wage increases
before the previous two recessions,
as well as signaled rising wages
ahead of the economic recovery.
1%
1.0%
0.5%
0%
0%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: PwC’s Trendsetter Barometer quarterly survey question: “Approximately, what percent salary increase for the typical hourly workers have you provided for in
your budget over the next 12 months?”
Oxford Economics / Haver Analytics
Peering into the payroll future
The monthly jobs report is about the past. But what about the future? Trendsetter’s leading indicator
gives you a heads-up on US headcount.
% of Trendsetter companies increasing
headcount in next 12 months
Quarterly change in US
private payrolls
90%
1,000
80%
500
70%
0
60%
-500
50%
40%
-1,000
30%
Trendsetter companies signaled
the US labor market's decline
heading into the previous two
recessions, as well as the
subsequent recoveries.
20%
10%
-1,500
-2,000
0%
-2,500
1995
2000
2005
2010
2015
Source: PwC’s Trendsetter Barometer quarterly survey question: “Is your business planning to add or reduce the total number of fulltime-equivalent employees over
the next 12 months?”
Oxford Economics / Haver Analytics
The numbers in the left Y-axis are the percentage of Trendsetter respondents answering “add employees” minus the percentage answering “reduce employees.”
Ahead of the borrowing curve
When Trendsetter private companies say their credit availability has improved, chances are you’ll see business
loans increase in the overall economy too, as was the case heading into the latest recovery.
C&I loans in bank credit quarter-overquarter annualized
% of private companies with greater
credit availability in the past quarter
40%
25%
30%
20%
20%
15%
10%
10%
0%
5%
As credit availability for Trendsetter
companies bounced sharply back from
its recession low-point, bank credit
gradually became more widely available
for other companies too.
-10%
-20%
0%
-5%
-30%
-10%
2008
2009
2010
2011
2012
2013
2014
2015
Source: PwC’s Trendsetter Barometer quarterly survey question: “In terms of banking relationships this past quarter, has your business’ credit line or amount of credit availability
increased, decreased or stayed the same?”
Oxford Economics / Haver Analytics
The numbers in the right Y-axis are the percentage of Trendsetter respondents answering “increased” minus the percentage answering “decreased.”
On the same pricing page
Trendsetter price movements tend to coincide with changes in the producer price index, indicating what the
broader market will bear.
US producer price index quarter-overquarter annualized
% of Trendsetter companies that raised
prices in the past thee months
15%
30%
10%
20%
5%
10%
0%
0%
-5%
-10%
-10%
This coincident economic indicator
also had some leading power early
in the economic downturn.
-15%
-20%
-30%
-20%
2008
2009
2010
2011
2012
2013
2014
Source: PwC’s Trendsetter Barometer quarterly survey question: "In the past three months, have your own prices gone up, down or stayed the same?"
Oxford Economics / Haver Analytics
The numbers in the right Y-axis are the percentage of Trendsetter respondents saying prices went "up" minus the percentage saying “down.”
2015
Revenue forecasts for Trendsetter companies outstrip
GDP projections for the US and world economies
GDP growth forecasted for 2015
2.5%
Revenue growth
for US private
companies
US economy
9.8%
Source: PwC’s Trendsetter Barometer, PwC, Q2 2015
GDP figures sourced from Oxford Economics
World economy
2.5%
1.6%
Eurozone
6.6%
China
7.1%
India
-1.6%
Brazil
-3.5%
Russia
Emerging markets: Reliable revenue growth
Trendsetter private companies that sell in emerging markets generally project higher revenue growth than
their domestic-only peers, with investment in those markets being part of their long-term strategy.
Revenue growth rates for companies selling in emerging markets vs those selling
in the US only:
2009
2010
2011
2012
2013
2014
2015
8.6%
12.6%
10.1%
9.4%
7.3%
11.1%
12.6%
5.4%
8.4%
8.4%
7.6%
8.0%
7.9%
9.4%
Emerging
markets
US only
Source: PwC’s quarterlyTrendsetter Barometer quarterly survey question: "What is the average percentage of revenue growth you expect for your company over the next 12 months?"
Emerging market data began to be collected in 2009.
Since 1995, PwC’s Trendsetter Barometer Business Outlook has tracked the views of top executive officers at
privately held US businesses and the trends these reveal. This quarter, we spoke with 225 chief executive
officers (CEOs/CFOs), including 127 from companies in the product sector and 98 in the service sector.
To find out more about private-company trends
and to discuss the survey findings,
please contact:
Rich Stovsky
Private Company Services Leader
[email protected]
Ken Esch
Trendsetter Partner Sponsor
[email protected]
Margaret Young
Partner, Private Company Services
[email protected]
Visit us online at http://www.pwc.com/us/pcs
© 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP, which is a member firm of
PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. 27922-20145