American Express (NYSE:AXP)
Historical Stock Chart
2 Months : From Mar 2019 to May 2019
More Than One in Five U.S. Finance Executives Plan to Increase Spending
Investment by 10% or More
Senior finance executives remain optimistic about the economy, the
outlook for their companies and their investments for the future,
despite economic and political uncertainty, according to the 2019 Global
Business & Spending Outlook, a survey released today by American Express
(NYSE: AXP) and Institutional Investor Thought Leadership Studio.
Worldwide headcount is estimated to grow by 9.18% in 2019, and the vast
majority of respondents (96%) expect to raise total compensation to
employees. Nearly two-thirds (65%) of companies worldwide surveyed
report higher or much higher revenue in the last 12 months, compared to
54% last year. In the U.S., 63% of respondents report higher revenues,
up significantly from 36% last year.
Global finance executives are optimistic, but not as optimistic as they
were a year ago. Fewer respondents anticipate substantial or modest
economic expansion in their country in 2019 (71%, down from 85% in
2018). Economic expansion expectations remain highest in the
Asia/Australia region (79%, down from 94% last year) and lowest in Latin
America (43%, down from 52% last year). In the U.S., three-quarters
(75%) anticipate expansion, down from 98% last year, but among those
anticipating expansion, 22% expect substantial expansion compared to 1%
The cross-industry findings in the joint American Express and
Institutional Investor study are based on a survey of 901 CFOs and other
senior finance executives of firms with annual revenues of $500 million
or more, located in North America, Europe, Latin America, Asia, and
Australia. The study was fielded in late November and December 2018. Now
in its twelfth year, the survey this year includes the addition of
Bahrain to the Middle East region.
“Despite operating in unsettled times, senior finance executives at
large, global companies are concentrating on their day-to-day business
but keeping an eye on the future,” said Antonio Gagliardi, Vice
President of Strategy, M&A and Alliances, Global Commercial Services,
American Express. “While they balance spending to drive topline growth
with profitability, they’re pressing ahead with expansion plans, which
include pursuing foreign trade opportunities, hiring and investing in
HIRING AMID A TIGHT POOL FOR TALENT
While headcount is expected to grow by 9.18% globally, survey
respondents are more likely to have difficulty hiring and retaining
talent but plan to hire aggressively to sustain growth. Aggressive
hiring to increase their workforce by 10% or more is expected at 27% of
companies in this year’s study, up from 17% last year. The proportion of
respondents in this most aggressive hiring segment rises in all regions
except Asia, where it falls to 23% this year, down from 30% last year.
In the U.S., the proportion of respondents anticipating employee growth
of 10% or more has risen significantly to 31% this year, up from 2% last
Queried on their companies’ most pressing hiring needs, respondents
reveal a tight labor market, expressing particular difficulty finding
and keeping production and operating staff (68%, vs. 41% last year),
admin and support staff (64%, up from 45% last year), IT staff (63%,
compared to 40% in 2018), and sales and marketing staff (62%, up from
40% in 2018).
While total compensation to employees is expected to rise by an
estimated 5.22% this year, to attract and retain talent in the coming
year, respondents will seek to improve the day-to-day work environment
(58%), provide career development for their employees (51%) and to
expand their health and retirement benefits (48%).
As a way to meet near-term staffing requirements in the coming year,
companies in all regions will make greater use of temporary and contract
workers (71%). Respondents also confirm their longer-term commitment to
using contractors, freelancers, and temporary employees in this year’s
study. Seventy-five percent cite the use of these workers as central or
important to their company’s employment practices two years from now, up
from 43% in 2018.
CUSTOMERS REMAIN TOP PRIORITY, AND BUSINESSES WILL SPEND TO BOOST
According to the survey, companies this year are most likely to spend
moderately to support topline growth without placing profits at risk.
Spending is estimated to grow by 8.15% across the entire response base.
More than one in five (22%) U.S. finance executives will increase
spending by 10% or greater (significantly up from 3% last year).
As they prioritize their business goals, global finance executives are
most likely to rate “better meeting customer needs” (71%, unchanged from
last year) as a top priority, followed by new market entry (45%),
business transformation initiatives (38%) and defensive maneuvers such
as remaining competitive against peer firms and protecting current
market share (each, 37%). In the U.S., respondents will focus on better
meeting the needs of customers (68%, down from 82% last year), remaining
competitive with other companies (48%, up from 12% in 2018), and
protecting share in current countries (42%, vs. 15% last year).
Companies’ spending in pursuit of these objectives are most likely to
focus on expanding production capacity (62%) and developing new products
and services (58%). Notable increases in the proportion of respondents
expecting to boost spending are expected in several categories,
including hardware and IT infrastructure (59%, up from 32%),
transportation and logistics (42%, up from 28%) and labor/headcount
(36%, up from 24%).
When asked about the number-one technology spending priority,
respondents say they are most likely to boost spending on data
collection, warehousing and reporting. Nearly one-in-five (19%) cite
this as their top spending priority, up from only 5% last year, followed
closely by business intelligence and data analysis capabilities (18%, up
from 6% last year).
Notably, senior finance executives are more likely to spend aggressively
on training or hiring for the next generation of technology rather than
on training or hiring focused on their current technology and systems.
More than 40% anticipate spending aggressively for training their
current staff on transformative technology. An identical proportion will
go to the external labor market for expertise in next-gen IT to
transform respondents’ businesses and operating activity.
NEXT-GEN TECHNOLOGY EXPECTED TO HAVE GREATEST IMPACT ON INDUSTRY
DYNAMICS OVER THE NEXT 5 YEARS
This year’s study reveals growing concern for the dramatic impact of
next-generation technology on competitive dynamics within industries
(31%, up from 23% last year). Expectations for major disruption on
company operations and performance (16%, compared to 18% last year) or
on countries have waned (14%, down from 21% last year). Among those
industries surveyed, the media entertainment/ travel (43%),
wholesale/retail (41%) and construction (38%) industries are most likely
to anticipate major disruption to their industry’s competitive dynamics.
Latin America is more likely to foresee dramatic disruption to industry
dynamics than any other region (44%, vs. only 10% last year).
Queried on the greatest technology challenge to their industry, senior
finance executives in this year’s study cite the use of artificial
intelligence (52%) and the Internet of Things (IoT), which includes
embedded sensors and ubiquitous, internet connected devices (48%). The
U.S. is as likely to express concern for blockchain as artificial
intelligence and IoT (each, 42%).
In line with their concerns and speculation about emerging technology,
respondents are most likely to report having begun investment in
artificial intelligence (62%), but they affirm the investment in
robotics and automation (64%) has yielded the greatest benefit to their
Respondents from Europe are by far the most affected by the General Data
Protection Regulation (GDPR), as 70% of respondents from the region,
compared to 37% overall, see GDPR disrupting their systems, processes
and decision-making abilities.
Charts and figures available by request.
The 2019 Global Business & Spending Outlook was conducted by
Institutional Investor Thought Leadership Studio (IITLS) and is based on
a survey of 901 senior finance executives from companies around the
world with annual revenues of $500 million or more. All survey responses
were gathered in late November and December 2018. IITLS estimates the
margin of error for the survey to be approximately +/-3.2% at a 95%
level of confidence.
ABOUT AMERICAN EXPRESS
American Express is a globally integrated payments company, providing
customers with access to products, insights and experiences that enrich
lives and build business success. Learn more at americanexpress.com
and connect with us on facebook.com/americanexpress,
Key links to products, services and corporate responsibility
and credit cards, business
credit cards, travel
travel, and corporate
View source version on businesswire.com: https://www.businesswire.com/news/home/20190410005022/en/
AMERICAN EXPRESSRosa Alfonso-McGoldrickrosa.firstname.lastname@example.org