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Marcum-Hofstra Survey Offers Insight into Impact of Trade policy, and Priorities for 2020

CEOs of middle-market companies are split on whether U.S. trade policy is helping the nation’s economy, with nearly 60 percent reporting their businesses are feeling the effects of new tariffs on imports from China and Mexico, according to the latest poll from Marcum LLP and Hofstra University’s Frank G. Zarb School of Business

Just over 45 percent of CEOs believe current trade policies benefit the economy, while 42.6 percent said the policies are harmful. The numbers shifted when the CEOs were asked to assess how trade policies affected their own companies: 35.7 percent said the policies were favorable, 31.8 percent said business suffered and 27.1 percent reported no impact.

Here are highlights from the latest Marcum-Hofstra CEO Survey, released in September 2019:

Impact of Tariffs

  • A majority of CEOs (58%) say their businesses have been directly or indirectly impacted by the imposition of tariffs on selected products from China and Mexico, with 34.1 percent reporting a direct impact and 38 percent reporting no impact.
  • Of those who said their businesses have been impacted by the tariffs, 55 percent said they would pass some or all of the costs on to their customers, 47 percent said they would absorb the cost of the tariffs through reduced earnings, 43 percent said they would seek new suppliers outside of China, and 42.3 percent said they would bring manufacturing back to the U.S.
  • CEOs across all 15 industry sectors expressed a positive view of the current business environment overall. Nearly a quarter gave their outlook the highest rating of 10, up from 18.4 percent in the first Marcum-Hofstra survey earlier this year.

Executives Plan to Invest in Technology

With optimism high, CEOs are looking to drive  growth with spending on technology and equipment upgrades . Those top priorities are followed closely by talent recruitment and workforce training. Diving into the numbers:

  • More than two thirds of executives ranked technology as one of their top three investment priorities in the coming year. Fully 26% ranked it a top priority and 23% as a second priority.

Technology is the top priority for:

–       43% of government/non-profit/education executives

–       43% of healthcare responses

–       39% of transportation participants

  • Almost half (49%) of those surveyed said equipment upgrades were in their top three  priorities. Upgrading equipment is especially important to:

–       47% of manufacturing executives

–       43% of government/non-profit/education executives

–     38% of restaurants/catering executives

Technology is crucial for companies to stay competitive, but so is the right talent. And the war for talent is on.

Talent Management is also a Top Priority for 2020

With unemployment at record lows, many organizations are refocusing on recruitment and talent management.

In the Marcum LLP-Hofstra University CEO Survey, 46% named talent recruitment as one of their top three  priorities for the year. Which industries are especially keen on recruiting talent next year?  

  • 31% of transportation execs ranked it their top priority
  • 19% of professional services CEOs rated it most important
  • 18% of construction executives.

Since finding the right talent is challenging, many businesses are upskilling new and existing employees, with 35% of those surveyed, rating workforce training a key investment for the coming year. Which industries rated workforce training a priority for 2020?  

  • 33.3% of advertising/marketing/PR/media executives
  • 17.6% of construction/Engineering/Mining execs
  • 13.6% of retailing leaders

Partnership Provides Hands-on Market Experience to Zarb Students

The Marcum LLP-Hofstra University CEO Survey was done in partnership with students in the Zarb School of Business MBA program, providing them with valuable real-world experience.

“This partnership with Marcum LLP on the CEO Survey affords students an opportunity to consider corporate decisions through the lens of the current business environment and to gain valuable insights regarding the perceived impact and strategic response on the part of company leaders,” says Dr. Andrew Forman, associate professor of marketing and international business in the Zarb School of Business.

The process begins with students assessing an array of external business factors with attention to those that might be most pertinent to mid-size business CEOs in the current environment. Questions related to these factors are combined with “evergreen” questions that track executive sentiment and attitudes over time. “Students then engage in an analysis of the data and form conclusions based on these findings,” says Forman.

“Students work on the surveys as part of a capstone course, and it really helps to emphasize that business decisions are not made in a vacuum,” Forman says. “Executives are always making decisions within the context of social and economic issues. The ability to do this—to make decisions in a dynamic environment including factors that are often outside the organization’s control—is crucial to becoming a good leader and something we focus on at Zarb.”

Check out the next installment of the Marcum-Hofstra CEO Survey, due out in January 2020.