Given economists’ expectations that the U.S. economy accelerated during the first three months of the year, it’s not surprising that executives at medium-size companies are growing more confident about future growth, as reported by a survey published on Wednesday by the National Center for the Middle Market. What’s more interesting is how much more confident they are about local economies vs. larger economies: Some 74 percent of executives surveyed were somewhat confident or confident about their local economies, while only 58 percent said the same for the national economy—and 40 percent were positive on the world economy.
To conduct the quarterly survey, the NCMM, which is funded by GE Capital (GE) and housed at Ohio State University’s Fisher College of Business, polls 1,000 C-level executives at public and private companies across the country. The survey is an attempt to reflect opinion at the 197,000 U.S. businesses it defines as mid-sized: those with annual revenue ranging from $10 million to $1 billion.
Midsized companies, which account for one-third of private sector jobs, are more confident about their local economies because they tend to have greater control within them, says Anil Makhija, the center’s academic director. “A greater proportion of their suppliers and customers are local than for large firms,” he says. “They tend to be embedded in the environment. They may even be pillars of the local community, and confidence tends to follow.”
That recalls something that Bloomberg Businessweek‘s Peter Coy reported on the relative optimism of executives at mid-sized companies when he wrote about the NCMM survey last fall:
It turns out that executives aren’t necessarily as pessimistic as the headline numbers in the survey might suggest, says Dan Henson, chief executive officer of GE Capital Americas. “If you ask them their view on the global economy, they’re very negative,” Henson said in an interview before the latest quarterly report was released. “You pull back to the U.S. and they’re still fairly down. You ask them about their industry and they feel a little better. Then you ask them about their own company and they’re confident in their ability to maneuver.”
Despite declaring greater confidence, respondents to the survey released on Wednesday forecast slower revenue, jobs, and stock market growth over the next 12 months, and they noted challenges that include new health-care laws, higher taxes, and the difficulty of finding employees with the right skills to fill company needs.
James White, chief executive officer at Jamba Juice (JMBA) in Emeryville, Calif., is among the executives who believe their companies can find the way to future growth. “We think the consumer continues to be challenged and continues to look for value,” White says. Businesses that figure out how to cope with uncertainties such as health-care costs “will find a way to win.”