Cautious Optimism
The most recent Marcum-Hofstra CEO Survey shows that nearly two-thirds of CEOs are concerned about the stability of their companies’ banks in light of the recent federal rescues of three banks. Despite that, nearly 88% of these leaders are maintaining their banking relationships.
That seems to bode well for the stability of the banking system, at least for now. It could be that many of the survey respondents have banking relationships with institutions in the “too big to fail” category. Still, their confidence may also be part of a general optimism found in the other survey results. 82% of survey respondents rated the business outlook as a 5 or higher, on a scale of 1-10, with 10 being the highest. That is despite ongoing concerns like debt ceiling negotiations, economic uncertainty, high-interest rates, talent scarcity and higher costs, to name a few.
However, there were some notable exceptions. In real estate—an industry where leaders are contending with declining home sales and the potential for a commercial real estate crash—only 11% of executives showed strong optimism about the business outlook, down from 45% in February.
It’s hard to tell where this will all lead. Despite high prices and interest rates, consumers are spending again, perhaps because interest rates may have peaked. After two months of decline, retail sales are up slightly as more consumers return to malls and restaurant dining. Try to get a restaurant reservation in New York City right now, and you may feel nostalgic for the quieter days of the not-so-recent past. And hospitality and tourism seem to be making a comeback.
At the same time, it appears that many companies are hitting their stride when balancing employees’ desire to work from home and return-to-work policies. In our survey, nearly 45% of CEOs said they allow employees to work remotely and plan to keep these policies in play for the foreseeable future.
Meanwhile, 13% have discontinued remote work, and 29% are considering pulling the plug. There were many reasons: productivity concerns, a desire for more face-to-face interaction and collaboration, and the belief that working from an office sets a more professional tone. Now that we’ve all experienced the many facets of remote work, it’s gotten easier for companies to make informed decisions about what works best for their company and their team.
Where 2023 will take us remains to be seen. The “new normal” isn’t all that easy to predict. But in the past few years, many businesses have developed a level of nimbleness and resilience that they didn’t know they had in them. That will come in handy no matter what the next quarters bring.
