QUARTER 1, 2018 - LEA Global...Technology – 27 CEOs (11.16%) Most selected by...

Welcome to the inaugural Marcum CEO Survey, a quarterly gauge of middle-market CEOs’ outlook on the current business environment and their priorities for the next 12 months. The Marcum CEO Survey is a companion to Chief Executive Group’s CEO Confidence Index.

CEO SURVEYQUARTER 1, 2018

marcumllp.com/ceosurvey

MARCUM CEO SURVEY, QUARTER 1, 2018 | pg. 1

8%

19

46

85

57

23

9

19%

35%

24%

10%

4%

110

10

20

30

40

50

60

70

80

90

109876543

0 0

21

PositiveNegative

What is your view of the current business environment on a

1-10 scale?

QUESTION

Industries giving an 8 rating to their outlook of the current business environment:

Construction

Financial Services

High Tech

Manufacturing (industrial goods)

Manufacturing (consumer goods)

Real Estate

Retail

Wholesale/Distribution

CEOs across all 16 industry sectors are optimistic about the current business environment. 99% rated their business outlook between 5 (positive) and 10 (very positive).

8% of CEOs rated their business outlook a “10.”

Half of the industry sectors surveyed most frequently rated their business outlook an “8.”

KEY FINDINGS

* The CEO Confidence Index is America’s largest monthly survey of chief executives, compiled by Chief Executive Group and published

on ChiefExecutive.net and in each issue of Chief Executive magazine. The Marcum CEO Survey is conducted in collaboration with Chief

Executive Group.

INDEX: A Weighted Average

of CEO Responses

7.77Marcum CEO Survey – Quarter 1, 2018

7.09CEO Confidence Index – Quarter 4, 2017

6.49CEO Confidence Index – Quarter 1, 2017

Marcum’s CEO Survey for the first quarter of 2018 found an improvement in CEOs’ outlook on the current business

environment, as compared to the findings of Chief Executive Group’s CEO Confidence Index* in the prior

quarter and one year ago.


cont’dWhat is your view of the current business environment on a 1-10 scale?

CEOs in 11 industry categories* will invest in technology.

CEOs in 10 industry categories* say talent recruitment will be their highest priority.

CEOs in 6 industry categories* will invest in workforce training.

CEOs in 3 industry categories will invest in mergers and acquisitions.

CEOs in 2 industry categories will invest in research and development.

CEOs in 2 industry categories will invest in geographic expansion.

All three top priorities selected by CEOs in 2 industry categories related to human capital.

* Includes “Other”

KEY FINDINGSOver the next 12 months, in which ways do you plan to invest in your company? Please select 3 and rank them in order of priority, 1 being the most important.

QUESTION

5246

32 3025

18 179

20

10

20

30

40

50

60

Technology Workforcetraining

R&D Equipment Talentrecruitment

Geographicexpansion

Mergers &acquisi�ons

Physicalplant

expansion

I do not planto invest

PRIORITY 2

86

35 28 22 20 16 14 124

0

20

40

60

80

100

Talentrecruitment

Technology Workforcetraining


R&D Equipment Physicalplant

expansion

Geographicexpansion


PRIORITY 1

4336 36

3022

18 15 13 9

0

10

20

30

40

50

Technology Talentrecruitment

Workforcetraining


Geographicexpansion


Equipment R&D Physicalplant

expansion

PRIORITY 3

(36%)

(23%)

(19%)

(16%) (16%)

(14%)

(10%)(8%)

(7%) (6%)(4%)

(20%)

(14%) (13%)(11%)

(8%) (7%)

(4%)

(1%)

(15%)(12%)

(9%) (8%) (7%) (6%) (5%)(2%)


TALENT RECRUITMENT86 CEOs (36%)

#1 PRIORITY INVESTMENT (Top 3 Answers)Top industries selecting each answer


30%

Professional Services and Other

9%

High Tech/Telecomm/IT

13%

TECHNOLOGY35 CEOs (15%)


26%

Other11%

Financial Services

20%

WORKFORCE TRAINING28 CEOs (12%)


39%

Construction/Engineering/MiningHealthcareWholesale/DistributionOther7%

Manufacturing (consumer goods) and

Professional Services

11%


cont’dOver the next 12 months, in which ways do you plan to invest in your company? Please select 3 and rank them in order of priority, 1 being the most important.

#1#2

#3TALENT

RECRUITMENT

WORKFORCE TRAININGTECHNOLOGY

TALENT RECRUITMENT

TALENT RECRUITMENT

TALENT RECRUITMENT

TALENT RECRUITMENT

WORKFORCE TRAINING

TECHNOLOGY

TECHNOLOGY

TECHNOLOGY

R&D

EQUIPMENT/WORKFORCE

TRAINING

TECHNOLOGY

TECHNOLOGY

MERGERS & ACQUISITIONS

M&A/TECHNOLOGY

TALENT RECRUITMENT

CONSTRUCTION/ENGINEERING/MINING

FINANCIAL SERVICES

HEALTHCARE

HIGH TECHNOLOGY

MANUFACTURING (INDUSTRIAL GOODS)

MANUFACTURING (CONSUMER GOODS)

INDUSTRY SPOTLIGHTPriority investments for the next 12 months


cont’dOver the next 12 months, in which ways do you plan to invest in your company? Please select 3 and rank them in order of priority, 1 being the most important.

QUESTIONWhat is the single most important influence for your business planning for the next 12 months?

Other key influences appear to be industry-specific. The next five prevailing influences were very similar in importance.

Technology – 27 CEOs (11.16%)

Most selected by Manufacturing-industrial goods (6) and Financial Services (5)

Access to capital – 27 CEOs (11.16%)

Most selected by High Tech (10)

Other – 27 CEOs (11.16%)

Most selected by Professional Services (8) and Manufacturing-consumer goods (5)

Labor – 25 CEOs (10.33%)

Most selected by Manufacturing-industrial goods (11)

Regulatory environment – 24 CEOs (9.92%)

Most selected by Manufacturing-industrial goods (6) and Financial Services (5)

KEY FINDINGS


11% 11% 11% 10% 10%

5%5%

4%

2%

27

74

27 27 25 24

13 11 95

0

10

20

30

40

50

60

70

80

31%Availability of talent (31%) was the leading answer by nearly three times the next nearest answer. The urgent need for access to talent is industry-agnostic, with CEOs in 14 of 16 industry categories saying this is the most important influence for their companies’ near-term future. This is an encouraging economic sign with implications for hiring, wage growth, worker training, and other financial and operational considerations.

INDUSTRY SPOTLIGHTMost important business planning influence

AVAILABILITY OF TALENT

(60%)

CONSTRUCTION/ENGINEERING/

MININGTECHNOLOGY/REGULATORY

ENVIRONMENT (28% each)

FINANCIAL SERVICES

ACCESS TO CAPITAL/AVAILABILITY OF TALENT/

TECHNOLOGY/INDUSTRY

CONSOLIDATION (18% each)

HEALTHCARE

ACCESS TO CAPITAL (40%)

HIGH TECHNOLOGY

OTHER (24%)

AVAILABILITY OF TALENT (36%)




cont’dWhat is the single most important influence for your business planning for the next 12 months?

CEOs’ view of the importance of diversification to their companies’ future parallels their overall outlook on the current business environment.

90% of CEOs rated diversification between 5 (important) and 10 (very important).

Most CEOs answered 8 (21.9%) or 7 (19.8%).

Only 23 CEOs out of 237 (9.7%) said diversification is not important to their future.

KEY FINDINGS

3733

5247

29

16

10553

0

10

20

30

40

50

10987654321

PRODUCT/SERVICEDIVERSIFICATION

Very ImportantNot Important

15.61%

13.92%

21.94%

19.83%

12.24%

6.75%

4.22%

2.11%2.11%1.27%


How important is product/ service diversification to your company’s future,

on a 1-10 scale?

QUESTION

cont’dHow important is product/service diversification to your company’s future, on a 1-10 scale?

INDUSTRY SPOTLIGHTImportance of diversification on a scale of 1-10

Most frequent answer by selected industries

HIGH TECHNOLOGY

10 (24%)

HEALTHCARE6

(27%)

CONSTRUCTION9/8/7

(21% each)

FINANCIAL SERVICES

4/6/8(22% each)


8 (24%)


7(30%)


CEO INSIGHTS


“The labor pool is very tight. This is putting pressure on wages and consumer prices.”

“We're having to change our work environment to make it more attractive to a more youthful workforce.”

“The strength of the economy will carry forward earnings growth. However, there are new regulations in the financial industry coming from states and federal agencies that leave us with questions about what future growth looks like.”

Dave Wickersham, CEOThe Leaders Group, Inc.

“Leveraging the macro tailwinds of big data, personalization, customization and e-commerce are critical to our growth plans.”

Michael Araten, CEOSterling Drive Ventures & The Rodon Group

“It has become increasingly difficult to find applicants for production and entry level positions in our geographic location.”

“Scaling up without a technology backbone is a recipe for disaster. Also, the new disruptive technology is making earlier practices obsolete in the short span.”


“We need to scale ahead of our opportunity since it takes a significant period of time to bring new talent on board and adjust to our culture.”

“Digital disruption of services continues to accelerate. It causes headaches and opportunity.”

“Everything is in play. All aspects of my industry are consolidating in unique and creative ways.”

“Increased regulations are creating significant barriers to entry.”

“We've seen our suppliers consolidate heavily over the last few years. We’ve seen our suppliers go from 8 to basically 4 today.”CEO INSIGHTS

“Successful expansion and performance, given the business has an effective infrastructure, is dependent on productive labor.”

“Given that the world is transitioning to mobile marketing and predictive analytics, we need to be there, too.”

Robert M. Donnelly, CMOFlo-Tite Valves & Controls

“Our business model is not based on growth but is based on innovation and continued profitability.”

Roger Cederholm, CEOMartin Automatic, Inc.

“We need to use our existing technology, as well as additional tech (software) to transition our business to the 'Amazon Economy' - small package vs. truck-load shipments, B2B and B2C platforms.”

34

24

31

40

35

35

20

9

14

14%

10%

13%

17%

14%

14%

8%

4%

6%

0 5 10 15 20 25 30 35 40 45

<$5 M

$5 M to $9.9 M

$10 M - $24.9M

$25 M to $49.9M

$50 M to $99.9M

$100 M to$249.9 M

$250 M to$499.9 M

$500 M to$999.9 M

> $1 Billion

Which of the following best describes your company's industry

DEMOGRAPHICS

75

25

22

21

19

18

15

11

10

6

5

5

3

2

2

1

1

31%

10%

9%

9%

8%

7%

6%

5%

4%

2%

2%

2%

1%

1%

1%

0%

0%

0 10 20 30 40 50 60 70 80

Manufacturing (Industrial Goods)

High Tech/Telecommunica�ons/Informa�on Technology

Other (please specify)

Manufacturing (Consumer Goods)

Professional Services (Legal, Consul�ng, Accoun�ng,…)

Financial Services (Banking, Insurance, Brokerage,…)

Construc�on/Engineering/Mining

Health Care (Providers and Payers)

Wholesale/Distribu�on

Retail Trade

Real Estate

Adver�sing/Marke�ng/PR/Media/Entertainment

Pharmaceu�cals & Medical Products

Government and Non-Profit

Transporta�on (Airlines, Trucking, Rail, Shipping,…)

Energy/U�lity

Travel and Leisure (Hotels)Which of the following best describes your company's industry?

100% = 241 100% = 242

In which revenue size range was your company last year?


Marcum LLP is one of the largest independent public accounting and advisory services firms in the nation, with offices in major business markets throughout the U.S., as well as Grand Cayman, China and Ireland. Headquartered in New York City, Marcum provides a full spectrum of traditional tax, accounting and assurance services; advisory, valuation and

litigation support; and an extensive range of specialty and niche industry practices. The Firm serves both privately held and publicly traded companies, as well as high net worth individuals, private equity funds and hedge funds, with a focus

on middle-market companies and closely held family businesses. Marcum is a member of the Marcum Group, an organization providing a comprehensive array of professional services.

Marcum Group is a family of organizations providing a comprehensive range of professional services including accounting and advisory, technology solutions, wealth management, and executive and

professional recruiting. These organizations include:

QUARTER 1, 2018 - LEA Global...Technology – 27 CEOs (11.16%) Most selected by...

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