Corporate confidence is increasing, but the majority of companies are still taking a cautious approach in 2010, research has found.
The survey by Ernst & Young, which polled senior executives at nearly 900 companies, found that, despite consensus that restricted access to capital will constrain growth this year, nearly a third said they intended to pursue growth aggressively.
A significant number managed to improve earnings last year. Almost a third saw a five per cent increase in earnings in 2009, and a small minority saw at least a 20 per cent rise.
Scott Halliday, a managing partner at Ernst & Young, said stimulus packages were partly responsible for the boost in confidence. “A pick up in confidence is not surprising, given the massive global government stimulus working its way through the economy,” he said.
Many companies still believe that 2010 will be difficult to weather, though. A majority of 53 per cent agreed that even seeing out the year would still be a challenge. “Companies may be less worried about survival over the next
12 months, but the return to a healthy operating environment is still some way off,” added Halliday. The survey found an even split over when earnings would recover. A third saw growth returning within six months.