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Economic uncertainty cramps outlook of private company executives

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New report indicates tempered optimism about future prospects for growth in the US economy.

A quarterly survey by professional services firm PwC indicates that private company C-Suite executives remain largely tepid when it comes to their expectations for growth in the US economy in the next twelve months. 

The firm’s Trendsetter Barometer survey for Q2 2016 depicts private companies as being extremely cautious in terms of their outlook for growth, with only 42% believing that the US economy is growing, down from 59% last quarter and 78% a year ago.

The good news, however, is that this top-line figure only decreased two points this quarter, after having plunged in the previous two quarters.

Further good news can be found in the optimism felt by executives concerning their own companies’ growth prospects.  The percentage of executives surveyed who expect revenue growth in the coming 12 months actually rose in the second quarter, hitting 91%, which is the highest figure since the first quarter of 2007 (92%). On the other hand, far more companies than usual are projecting single-digit growth compared with those forecasting double-digit growth (18% vs 73%). And their projected rate of growth has slowed to 6.3% - the first time in three years that this figure has come in below 7%.

“There is still significant strength in the economy,” said Shawn Panson, PwC’s Private Company Services leader. “The latest jobs report is a renewed sign that the fundamentals remain solid. Meanwhile, private companies’ spending plans and revenue forecasts suggest that despite the current atmosphere of uncertainty, these businesses aren’t sitting on their hands. Instead, they remain focused on growth, and that bodes well for the economy overall.”

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