Amidst an unprecedented global pandemic and disruptions to the economy, more than 1 in 2 business leaders (53%) expect their companies to return to normal in the next 12 months, according to JPMorgan Chase’s Business Leaders Outlook Pulse Survey released. The majority of business leaders remain hopeful in the face of adversity: while most (83%) are running at a reduced capacity, 68% are confident their businesses will thrive and just 2% are concerned their businesses may not survive.
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“It’s been incredible to witness the resilience, flexibility and innovation of America’s businesses during an extraordinarily difficult year for all people around the world”
Looking ahead to the next six months, more than half of business leaders (56%) are optimistic about their companies, but confidence dwindles on broader levels. Approximately one in three respondents are optimistic about the local economy (33%) and national economy (35%), while confidence in the global economy is considerably lower at 17%.
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“It’s been incredible to witness the resilience, flexibility and innovation of America’s businesses during an extraordinarily difficult year for all people around the world,” said Jim Glassman, head economist, JPMorgan Chase Commercial Banking. “From speaking with business leaders across the country, it’s clear that some of the most agile companies are gaining market share, particularly in industries like technology and e-commerce.”
As a result of this year’s disruptions, these are the top five actions business leaders are taking:
- Conserving capital for unforeseen needs: Most business leaders (87%) have already built up their cash reserves or plan to do so in the next three months. Not surprisingly, 71% have either reduced their spending on capital expenditures or are planning to do so.
- Learning from the crisis: With continued uncertainty around economic conditions and a potential second wave of COVID-19, 82% of businesses have already prepared or are planning to prepare for a similar event in the future.
- Managing business finances digitally: The majority of business leaders (59%) have either already increased or plan to increase their use of digital banking and treasury management tools to manage cash flow, send and receive payments, and streamline operations.
- Implementing permanent changes to operating models: As a result of implementing remote working capabilities, more than half (56%) of business leaders have already made permanent changes to their operating models or plan to do so in the next three months.
- Shifting the business online: More than half (54%) of business leaders have also shifted their operating models to be more online or plan to do so, as a result of pandemic-related closures and shifting consumer habits.
While many business leaders are cautiously optimistic about the future, they’re faced with the realities of an unpredictable operating environment. Their top three challenges are:
- Uncertain economic conditions: The vast majority of business leaders surveyed (70%) cited economic uncertainty – both domestically and globally – as the leading challenge facing their business operations.
- Revenue and sales growth: 59% of business leaders are concerned about growing sales, though with certain industries seeing an uptick in demand, 47% reported that they’re expecting an increase in revenue and sales within the next six months.
- Shifting consumer habits due to COVID-19: The pandemic accelerated a behavioral shift of consumers leaning in to e-commerce technology for purchasing, in addition to spending more conservatively overall. Changing consumer habits is a leading concern for 33% of business leaders.
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