A gloomy economic stasis has taken hold, responses to a McKinsey Quarterly survey—in the field from March 10, 2009, through March 16, 2009—indicate. The percentage of the executives who say economic conditions have gotten worse at the national level hasn’t increased, but fewer than a third expect an upturn this year.
Executives overall are confident with how their companies are managing the crisis, though 53 percent expect profits to drop in the first half of 2009, and the number expecting to shed workers has jumped eight percentage points in six weeks. Companies that executives describe as well managed are likelier than others to be reducing both operating costs and capital spending—and perhaps not weakening operations a great deal, because these companies are also likelier than others to be improving productivity. Overall, the results show that most companies are not actively seeking more cash.
This survey also solicited executives’ views on some topics of intense public debate. Respondents think “bad banks” are a good idea, disagree on whether CEOs are paid too much, and overwhelmingly say the public trusts business less than it did before the crisis—and lay the blame at the doors of financial firms.