Business leaders are more optimistic now than they’ve been in 11 years

As people start to adjust to pandemic life and get used to the new normal, business leaders hav been expressing more optimism for the immediate future than they have since 2010.

The JPMorgan Chase 2021 Business Leaders Outlook Pulse survey found that the percentage of business leaders bullish about their companies and industries was the highest recorded in 11 years. Around 80% predicted higher revenue or sales for 2021, and 71% expected continued growth for the remainder of the year. These figures are up from 2020’s percentages of 47% and 41%, respectively.

Source: JPMorgan Chase 2021 Business Leaders Outlook Pulse survey

Conducted in July 2021, the survey revealed that business leaders are feeling good about the national and global economy — 53% interviewed had a rosy outlook for the worldwide economy’s immediate future and 75% for the national economy’s.

Business growth

On top of higher expected revenue and profits, the survey revealed that more business leaders expected their capital expenditures and credit needs to grow as well. These are strong indications that businesses are gearing up for expansion plans, a significant change from the outlook a year ago.

Almost half (46%) expected to increase their capital expenditures, while 38% said their credit needs would increase throughout 2021. Furthermore, 88% of executives reported that they anticipated company growth in the near term, up from 56% one year ago, when pre-Delta COVID was at its peak.

Hiring and jobs

With executives expecting profits and revenue to continue growing for the rest of the year, hiring plans are also on the rise. When asked about their six-month hiring plans, 81% of business leaders planned to hire, 18% planned no hiring changes, and only 2% planned workforce reductions. With the economy reopening and vaccination rates rising, many executives said they saw significant hiring needs within the next six to 12 months.

However, the current labor market situation is challenging, so business leaders may need to rethink their hiring strategies to keep pace with the expected growth. This may mean redefining how they recruit, train, and lead.

Returning to work

Despite many experts calling for a reduction of the workspace, two-thirds of respondents said they would keep their office space the same and not make any changes. Out of the business leaders who reported expanding their workspace, most cited company growth as their main reason (89%).

Regarding flexible work, business leaders were split: 54% planned to have a flexible post-pandemic work environment. Among this group, 26% were implementing a new model because of COVID, 15% were expanding a prior flexible working model, 12% already had a flexible work environment in place, and only 1% planned on implementing a 100% remote environment because of COVID.

Despite more than half of respondents planning for a flexible work environment, nearly 40% reported that they expected all employees to work on-site post-pandemic, and 8% were not sure yet. The top concerns with flexible work included preserving the company culture, maintaining productivity levels, and preventing and preempting cyber fraud attacks.

Challenges

Despite the high optimism among business leaders, almost all (95%) reported that they expected at least one business challenge within the next six to 12 months.

The main challenge reported by business leaders was ongoing supply chain issues (62%). COVID has left bottlenecks that are going to make it tough to keep up with increasing consumer demand.

Other predicted challenges included uncertain economic conditions (37%), revenue growth (35%), and preserving company culture in a work-from-home environment (27%).

Business resilience and bounceback

To combat the challenges COVID has presented, many business leaders had implemented resiliency strategies in one of two areas: digital adjustments and changes to operations; and new product and service lines outside of traditional business lines.

These weren’t the only things business leaders were trying out: 39% reported expanding e-commerce capabilities, 38% digitized account management processes, 38% expanded into new geographical areas, 25% updated financial-technology systems, and 6% merged with another business.

Almost two-thirds of business leaders said they made changes or additions that they planned to keep post-pandemic. Most also said they would keep their updated supply chains as well.

The Future

At midyear 2021, the nation seemed to be optimistic about the economy and stock market’s ability to bounce back from COVID. Bullishness regarding the coming years stood at all-time highs among executives.

For the future, most businesses were looking to refine their recruiting, hiring, and training processes, increase digital adoption (over 64% made digital adjustments to their business during the pandemic), and consider new product lines and business models.

The 2021 Business Leaders Outlook Pulse survey was conducted online between June 7 and June 18. It asked 1,375 senior executives about their six-month view of the current business environment. Executives were chosen from midsized U.S. companies with annual revenues between $20 million and $500 million.