Warren Buffet, Joan Paxton and 69 Percent of CEOs Cautiously Optimistic for 2012

Warren Buffet, Joan Paxton & 69 Percent of CEOs Cautiously Optimistic for 2012

Well the Oracle of Omaha (Warren), and the Seer of Stillwater (Joan) are at it again.

While having lunch last week, Joan and I were talking about the economy and she mentioned that she was cautiously optimistic about 2012.  While we’ve done well here at TriStarr the last few years (regardless of the weak employment market), it’s been very difficult to look forward and make any real solid forecast for the future.  But apparently Joan and Warren have been talking and are in agreement with a majority of business leaders – there is optimism for 2012.

Based on surveys performed by ChiefExecutive.net, 69% of CEO’s are optimistic about 2012, Warren and Joan included.  Buffet is buying, and he’s been right more than wrong.  ChiefExecutive.net’s CEO Confidence Index rose in the Fall after a drop over the Summer.  Initial indications for January show continued improvement in the index.  Along with that, hiring seems to be on the increase, and unemployment numbers are at their lowest in 3 years.  Companies are sitting on record amounts of cash.

So what’s holding businesses back?  Well, to answer that would take way more space that I like to consume in a blog.  Suffice to say – it all boils down to confidence.  Leaders are more likely to make decisions and investments when there is some certainty and confidence in the future – they’re just hedging their risk.  The economy has had several years of ups and downs, starts and stops, and an overall feeling of uncertainty.  As that uncertainty slowly changes and patterns begin to emerge, leaders will begin to feel more comfortable making investments.  The fact that more than 2/3 of CEO’s surveyed for this study are optimistic is a positive indicator for me.

For my business what’s most important is hiring.  It’s my opinion that what will lead us out of the doldrums and increase growth is more people working, collecting a paycheck, and spending money.  Here’s a graph that is most telling to me:

(You can click on the graph for an expanded view)

This graph follows the pattern that we have seen in our business in 2011.  Our clients hired more of our employees onto their payrolls in 2011 than they did in 2009 and 2010.  The curve has been trending down, but seems to be headed up – the RIGHT direction.  This bodes well for 2012 as far as we’re concerned.  Are we looking at 2006-2007 levels yet?  Not by a long shot.  But there are strong indications that we are on a positive trend, although we still expect only small to moderate  growth.

As always, I’m interested in what others think for 2012 –What you see?  Please post a comment below, or send me a message.

Scott