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NEW YORK, April 26, 2001— Major U.S. firms
are scrambling to revise their forecasts and business plans and to scale
back operations for the remainder of 2001 as economic growth slows, according
to a new survey of 804 executives by American Management Association.
Nearly half (45%) say their companies will not meet revenue targets set
at the beginning of the year, the survey found, and two-thirds report
reviews of plans and targets due to recessionary pressures or forecasts.
Sixty-four percent have already taken actions such as job cuts, hiring
freezes, and reductions in new investments because of recession fears.
Manufacturers have been quickest to cut back on operations or expenditures,
with 74 percent reporting one or more such actions compared with 58 percent
of service firms and only 47 percent of financial services providers.
Manufacturers are twice as like to report job cuts as service firms (36%
vs. 18% respectively).
While opinions among surveyed executives are varied on the current and
future state of the economy, half of the firms are operating on the assumption
that a slow-down or recession is a current fact of economic life, and
an additional 28 percent have contingency plans for slow or negative growth
but are not yet acting on them.
A large majority of surveyed executives (63%) agree that the economy is
growing more slowly now than in the second half of 2000, and 16 percent
say the economy is currently in recession. Looking ahead, 38 percent say
that the economy will slow down further before beginning a recovery, and
24 percent think that current slow growth will continue through the year.
Nineteen percent look for a second-half improvement, and 18 percent say
that improvement has already begun.
The survey was performed on April 17–20 among managers and executives
in AMA-member and client firms. The sample has a ±3.5% margin of
error.
American Management Association is the world’s leading membership-based
management development organization. It is distinguished by the quality
of its faculty of global business practitioners, the practical action-oriented
focus of its learning programs and the dynamic, interactive nature of
its courses. AMA offers a full range of business education and management
development programs for individuals and organizations in the Americas,
Asia and Europe. More than 700,000 AMA customers and members a year, including
488 out of the Fortune 500 companies and many federal agencies, learn
superior business skills and best management practices through a variety
of seminars, conferences and executive forums, e-learning and self-study
courses, books, research, and on-site and customized learning solutions.
To view a summary of the 2001 AMA Survey: Current Economic
Conditions visit the AMA research site at: http://www.amanet.org/research.
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