Half of U.S. firms polled fall short of 2002 projections

Half of 370 U.S. companies surveyed did not make their revenue targets in 2002, according to the American Management Association's 2003 Current Economic Conditions survey. Even though the figure is an improvement from 58 percent of businesses who did not met their goals in 2001, several companies indicated they will make changes in 2003.

According to the survey, 36 percent of businesses anticipate hiring freezes and 34 percent expect job eliminations. Another 31 percent said they will have hiring cutbacks and 26 percent said they will reduce training and development expenditures.

Nearly half (49 percent) of respondents think the economy is declining; this is compared to 38 percent who saw a decline one year ago. Even with their economic worries, only 27 percent said they have lower expectations, 37 percent said they are not lowering expectations and 36 percent anticipate a higher rate of performance.

To help cope with the economic worries, many organizations are making changes, including reviewing budget forecasts (68 percent) and business plans (62 percent), reorganizing positions or responsibilities (58 percent), scaling back travel expenditures (46 percent) and scaling back planned expansions or activities (26 percent).

Only 9 percent of respondents expect a great impact on their business from the war with Iraq, but 53 percent believe there will be moderate impact. In the long term, more than half of respondents foresee a moderate (50 percent) or great (6 percent) impact.

This survey is based on 370 executive members and corporate customers surveyed in February and March. For more information on this study visit www.amanet.org.