Progress in motion

Wider margins

Corporate performance should get a boost from higher profits, according to one-half of all U.S. companies surveyed, up from 41% in the last study. Thirty-one percent think their profit margin will stay the same and 20% predict declines this year.

Growing revenues

Possibly driven by growing confidence in the U.S. economy and sectors, and consistent with their higher profit projections, 64% of CFOs are expecting their company's revenues to increase this year, up from 56% previously. Of the remaining, 31% predict their revenues will stay the same and 5% think they will contract.

Higher prices

For the first time in three years, more than half of all U.S. companies surveyed intend to increase the prices of their products and services. Currently, 57% of CFOs expect price increases in 2012, up from 50% previously. This pricing strategy is consistently held by all CFOs regardless of industry sector, geographic region, sales size, company type or level of foreign market involvement.

Ongoing investment in R&D

Given that research and development spending generally indicates a company's commitment to grow, it is promising to see that the 2012 R&D expenses of most companies will be the same as or higher than they were in 2011. Twenty percent of companies will spend more on R&D in 2012, 63% will maintain current spending levels, and only 3% plan to reduce R&D expenses.

Domestic focus

Future corporate growth may hinge on developing new products or processes to improve and expand operations in the U.S., based on 87% of companies who report spending their R&D dollars domestically (72% entirely in the U.S. and 15% mostly in the U.S.). Of the remaining, 6% say that their R&D expenses are split evenly between their U.S. and international operations and 6% say their R&D dollars are spent mostly or entirely overseas. Among U.S. companies with foreign operations, 69% of their R&D expenses are made in the U.S., 20% are made internationally and 21% are split equally between the two.

Job growth

As the nation's workforce expands, the likelihood of sustainable economic growth increases as well. Fifty-one percent of companies are planning to hire additional permanent and/or contract employees this year. Forty-three percent have no plans to change the size of their work force and only 8% are making reductions in staff size.

Energy costs heating up

From a financial perspective, U.S. companies are growing more concerned about energy costs (51% versus 43% previously), likely driven by price volatility and ongoing geopolitical uncertainty. Concern over healthcare costs is down from a high of 56% in the previous survey to 51%, though pending rulings on healthcare reform loom large. Concern about consumer confidence, cash flow and unemployment levels has dropped significantly, a positive sign for U.S. growth prospects.