Midsize companies in the U.S. remain cautious about economic growth this year, but they are making modest investments to expand their business and add to their payrolls, according to a recent analysis from Deloitte & Touche LLP.
The accounting and consulting firm said that just under half the companies surveyed expect to see revenue growth or plan to hire more workers this year, citing concerns about the uncertainty of healthcare costs and taxes.
“The lack of certainty is holding people back from the hiring that I think we would all like to see,” said Scott Hurwitz, a Chicago-based partner at Deloitte. “People are hiring, but it’s still at a moderate pace.”
In March, market researchers hired by Deloitte surveyed 525 senior executives working at companies with annual revenues of between $50 million and $1 billion. More than 80 percent of the companies were privately owned.
Of those polled, 46 percent expected higher revenues over the next 12 months, compared with 58 percent of executives in 2012 who anticipated higher revenues.
Few executives said hiring in 2013 was their top priority, though 40 percent said they plan to add to their full-time workforce, down 9 percentage points from last year.
Hiring qualified workers is a concern. More than half said it was difficult to find workers with the right skills and education to meet their needs, Deloitte said. Companies also said they were more likely to invest in training this year for existing employees than they were to hire new ones.
Close to 60 percent of executives in Deloitte’s survey ranked the uncertainty of the economic outlook as the biggest obstacle to economic growth in the U.S.
And companies are increasingly concerned about the effect legislative issues have on the economy. More than 50 percent of executives saw government budget challenges, rising healthcare costs and high tax rates as obstacles to U.S. economic growth.
Executives were significantly less concerned about the effect of the European debt crisis and the housing market than they were last year, the survey said.
“I think the uncertainty is really about governmental policy,” Hurwitz said. “It’s not as much an issue about what the policy is, but about the fact that it is unresolved.”
Still, executives saw hope for growth of their companies, particularly in domestic markets. Those executives named organic growth in domestic markets as their top growth strategy, followed by the development of new products and services, and increased productivity.
Count Coyote Logistics in Chicago as one company that expects business to grow. Coyote, which was founded in 2006, is quickly growing in the third-party logistics industry, matching companies and truck carriers to transport goods across the nation.
Coyote CEO Jeff Silver says that although the company has already made inroads in the food, beverage, paper and retail markets, there is room for more growth.
The company, which has about 1,250 employees, plans to make additional hires this year.
“While it’s not an easy economy to make a living in, it can be great for very strong and lean companies,” Silver said.
“We’re going to continue to hire and add to this great workforce that we’ve got,” Silver said. “Our growth requires that, which is wonderful.”