Dallas (SMU) – For the fifth year, SMU Cox School of Business has surveyed area business leaders about their economic outlook for the coming 12 months. The results will appear in the December issue of DCEO magazine. Although CEOs were pessimistic about the world economy, responses about the local economy continue to reflect optimism.  Invitations to participate in the annual SMU Cox CEO Sentiment Survey™ were sent to a comprehensive list of DFW-area CEOs, presidents and business owners, with 436 respondents completing the survey.   

With the economy on the steepest downward trajectory since experiencing a slight upturn following the plunge in 2008, the roller coaster ride continues. Overall, this year’s surveys reflect that uncertainty, with CEOs expressing a more negative sentiment about the economy than they have in any of the previous four surveys.

This year, respondents were asked how their businesses fared last year.  The answers indicated that in spite of a very difficult business environment, 37 percent of CEOs reported meeting their business objectives, and another 30.2 percent exceeded them.  Even so, only 42 percent of respondents expected the local economy to grow.  That is the lowest level ever recorded in the annual survey.  It is a more optimistic outlook than respondents expressed for the global economy, however, with 59.5 percent expecting a decline in the world economy in the next 12 months.   Meanwhile, a record 40 percent of the CEOs surveyed expected the nation’s economy to decline in 2012. That’s a higher percentage of CEOs predicting an economic decline than was recorded during the most difficult recession year of 2008.

The survey was compiled and conducted by Miguel Quiñones, professor of management and organizations at SMU Cox, and Robert Rasberry, assistant professor of management and organizations. In addition to covering economic topics and labor force issues, it also queried CEOs about quality of life matters and their own sense of job security and satisfaction.

“Most CEOs who participated in the survey have seen their businesses meet or exceed their business objectives, and they remain optimistic about the future profitability of their companies, but they are still much less optimistic about the economy outside of DFW,” said Quiñones. “Perhaps what they are telling us is that they feel good about the things they know, specifically their businesses, but have more doubts about those they don’t.”  

Select survey findings follow:  

LAST YEAR’S BUSINESS PERFORMANCE

When asked how their businesses fared last year, 37 percent of CEOs reported meeting their business objectives, and 30.2 percent reported exceeding them.  This included meeting or exceeding their objectives in terms of profitability (61.9 percent), growth (63.8 percent) and revenue (67.5 percent).

ECONOMIC OUTLOOK

A majority of respondents, 59.5 percent, expressed pessimism about prospects for the world economy, expecting a decline over the next 12 months. In last year’s survey, 31.3 percent expected a decline.  29 percent of this year’s respondents expected no change and only 7.6 indicated a belief that the world economy will improve.  That’s in contrast to 29.6 percent who expected improvement last year.

OUTLOOK FOR DFW AREA BUSINESSES IN 2012

Although 67 percent of those surveyed expect their costs to increase over the next 12 months, 62.3 percent also expect their revenue to increase at the same time.  Last year, 57.5 percent had that expectation.  Most respondents expect to maintain (51.5 percent) or increase (25.9 percent) their training budgets. Few (16.6 percent) expect decreases in their staffing levels.  Meanwhile, 34 percent will be adding to their payrolls.  In addition, 44.5 percent of CEOs surveyed expect to maintain current levels of capital expenditures and another 30.1 percent will seek increases.

EVALUATING THE DFW AREA

As in last year’s survey, more than 55 percent (55.5 percent in this survey) indicated that DFW represents the best growth opportunity for their company in 2011. Of the CEOs surveyed, 43.9 indicated that more than 75 percent of their sales come from the DFW area.  CEOs were also asked to rate factors they felt contributed to our area’s quality of life. At the top of the list (56.5 percent) was cost of living.  Other key factors cited by this year’s respondents were quality of the travel and transportation infrastructure (13.6 percent) and weather and entertainment opportunities (7.2 percent each).

LEADING THROUGH UNCERTAIN TIMES

When asked to identify the leadership attributes necessary for success, CEOs listed the following:  sound decision-making (59.2 percent), strong ethical behavior (56.4 percent), strategic thinking (43.3 percent) and being a good judge of people (29.1 percent).  76.6 percent indicated they gauge their own success in leading others by way of the company’s success.  Mark Cuban, Owner and CEO of Dallas Mavericks Named "CEO of the Year"

As part of the survey, participants were asked to nominate their choice for "CEO of the Year" - the top CEO/president currently serving in DFW, based on organizational and DFW community impact. Mark Cuban, owner and CEO of the Dallas Mavericks, was named CEO of the Year. This comes just months after the Mavericks won their first NBA title in 31 seasons.  Cuban is currently involved in the NBA negotiations between owners and players. “A CEO is only as good as the people around him.  So each of the many people who are part of the Mavericks organization deserve this award as much as I do,” said Cuban.

Comprehensive survey results can be viewed at www.coxceosurvey.org. The results will also be featured in the December issue of DCEO. 

About SMU Cox

SMU's Cox School of Business offers a full range of business education programs, including BBA, full-time MBA, Professional MBA (PMBA), Executive MBA (EMBA), Master of Science in Management (MSM) and Executive Education. The school also offers a number of unique resources and activities for students, ranging from its Business Leadership Center (BLC), Caruth Institute for Entrepreneurship, Maguire Energy Institute and American Airlines Global Leadership Program (AAGLP) to its Associate Board executive mentoring program and an international alumni network with chapters in more than 20 countries. SMU Cox is ranked among the top business schools nationally and internationally by major publications, including Bloomberg Businessweek, The Economist, Financial Times, Forbes, The Wall Street Journal and U.S. News & World Report.

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