The Corporate Executive Board Company (NASDAQ: EXBD) today announced the second quarter results of its Business Barometer survey of business conditions at the world’s largest organizations. Faced with heightened economic uncertainty, senior executives maintain a positive growth outlook, but nearly 80 percent anticipate increasing cost pressure in the next 12 months. While some companies are in outright cost-cutting mode, executives forecast increased capital expenditure and staffing levels.

The CEB's Business Barometer evaluates 28 leading indicators of business performance across sourcing, manufacturing and distribution functions.

"The results of the Barometer reflect the desire of senior executives to build flexibility into business plans and ensure effective responses to uncertain economic conditions. The forecasted increase in capital expenditure and staffing levels, viewed in light of expected reductions in general and administrative expenses, indicates a cautious posture toward top-line growth," said Michael Griffin, a senior director at the Corporate Executive Board.

Key findings revealed in the second quarter executive survey include:

• Cutting Expenses Rather than Business Investment: While 50 percent of Chief Financial Officers anticipate lower General & Administrative expenses, more than 60 percent forecast higher capital expenditure levels. Sixty-three percent of Chief Information Officers forecast growth in discretionary IT-related capital expenditures.
• Cost Pressure Most Acute in Frontline Functions: Anticipated cost pressure is most acute in customer- and supplier-facing functions such as Supply Chain, Procurement, and Sales; more centralized staff functions such as Finance and IT forecast more moderate increases in cost pressure.
• Increasingly Competitive Customer and Labor Markets: Nearly 60 percent of Heads of Sales anticipate increased reliance on discounts or financial incentives in the next 12 months, while 51 percent of Chief Human Resources Officers expect an increase in unwanted staff turnover.

About the study

More than 350 senior executives at the world’s largest organizations in North America, Europe and Australia participated in the Corporate Executive Board’s Business Barometer survey in May 2007.

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