Corporate growth optimism

Company revenues are expected by 93% of respondents to the ACG/Thomson Financial Corporate Growth survey to increase in 2004. Organic growth through investment in sales and marketing and M&A were each cited by 31% of respondents as the best strategies to achieve growth in 2004, followed by investments in product development (15%) and strategic alliances (11%.) Respondents said the greatest external catalyst for corporate growth in 2004 would be an improving economy (49%) followed by a strong M&A market (27%.)

Charles W Downer, CEO of Downer & Company LLC and immediate past-president of ACG, said: “From corporations to private equity firms to banks, and from small to middle-market to billion dollar companies, there is optimism about the environment for corporate growth and dealmaking in 2004. This tells me that two major stumbling blocks to recent deals, economic uncertainty and disagreement on valuation, are receding and we may see a significant pickup in activity.”

Respondents say the sectors that will experience the most organic growth are healthcare, life sciences and medical equipment and services (39%), followed by technology (22%), business services (13%), and manufacturing and distribution (12%.) Within technology the sectors predicted to experience the greatest organic growth are wireless and telecom (29%), followed by biotechnology (26%), information technology (20%) and software (11%.)

Greatest potential obstacles for corporate growth in 2004 is lack of sales (30%), competition (20%), lack of capital (18%) and lack of vision/ strategy (11%.) A poor economy is the greatest potential obstacle (51%) followed by increased offshore manufacturing (10%) and weak consumer spending (9%.)