June 12, 2002—TEC International, an organization of CEOs of small to mid-sized businesses, released 2nd quarter (Q2) results of the TEC Index, a quarterly survey of chief executives.
Highlights of the results include predictions for economic recovery by the end of 2002 dropped from 86 percent in Q1 to 77 percent in Q2, while predictions for recovery in the first half of 2003 doubled to 22 percent in Q2 from 11 percent in Q1. Short-term projections for the remainder of 2002 are cautious, but projections for the next 12 months are fairly robust: 63 percent of CEOs expect sales revenue to increase and 16 percent say sales will increase by more than 20 percent. Only 12 percent are expecting decreases of up to 20 percent, while only three percent expect sales to decline by more than 20 percent. All of this activity is expected in the first half of 2003, making for a vigorous recovery.
Retail ranked as the highest sector for recovery expectations. Thirty-three percent of TEC CEOs expect retail to rebound first, a significant jump from 17 percent in Q1. Manufacturing slipped to second place from first, dropping three points to 26 percent; biotech remained in third place, but gained a four-point increase in confidence from Q1, up to 25 percent. The IT sector suffered the biggest loss in confidence, dropping five points to 21 percent for Q2. Automotive picked up three points this quarter, at seven percent, while telecomm remained unchanged at seven percent.
CEOs project telecom will be among the slowest industry to recover, however 55 percent of CEOs surveyed believe that wireless communications will make the most significant technological advancements during the next three years. Fifty-one percent of the CEOs cited investment in human capital as the most important business strategy to implement during the next six months for long term growth. This statistic is inline with the May 2002 unemployment report, which states unemployment is down, and more than 41,000 new jobs were created during the month.
Although the TEC Index typically focuses on future projections, this quarter TEC asked CEOs to take a look back and evaluate business lessons they have learned during the past 18 months of economic slowdown. Fifty-seven percent said they would have responded faster to economic changes, while 39 percent stated that they would have continued to invest in marketing efforts.
For more information, including the entire 2002 TEC Index Survey results, contact TEC International.
