CEO Confidence and Consumer Demands on the Rise: Marcum-Hofstra CEO Survey

FEBRUARY 28, 2023 (New York City, NY) – Middle-market CEOs are feeling better about the current business climate and less fearful the economy will fall into recession, according to the latest CEO survey from Marcum LLP and Hofstra University’s Frank G. Zarb School of Business.

Highlights of the survey, conducted earlier this month, also reveal that about a quarter of companies have begun to use artificial intelligence tools in operations, as more than half say their customers and clients have become more demanding in the past year.

Business Trendlines

CEOs’ outlook on the economy and business maintained a positive trend from the previous survey in late 2022, including sentiment about a possible recession. Significantly fewer executives (33%) said they are “very concerned” about a recession in the coming year, a notable improvement from 47% in the November 2022 survey, and 55% in September. More CEOs say they are “somewhat concerned” about the prospect of recession — 54% currently as compared to 43% in November.

Those with a positive overall outlook on the business environment rose to 84% from 80% in November. The weighted average continued to hover in the mid-range on a scale of 1-10, advancing to 6.6 from 6.4 in November, but down from the 6.7 recorded in September.

On an industry basis, the greatest CEO optimism was seen in food, beverage & hospitality (64%) and technology (47%). Construction CEOs were decidedly less upbeat than in other sectors, with only 25% selecting the highest ratings on the optimism scale.

The three most important influences for business planning cited by CEOs were “economic concerns,” “availability of talent,” and “rising material/operational costs.”

Succession Planning

Recognizing that succession planning is an essential process for business continuity, retaining talent, and developing future leaders, 79% of CEOs indicated that their companies have a succession plan in place. However, only 45% are “very confident” in their company’s succession plan and three percent are not at all confident.

Among those without a succession plan, 41% said it is not a priority for their companies, while 29% said they don’t know how to approach developing one, and 27% said “the business will take care of itself when the time comes.”

Customer Expectations

In an increasingly competitive environment, more than half of CEOs (58%) say their customers or clients are more demanding and have higher expectations than the past year. Among the explanations offered by CEOs:

• “They have been more needy because of all the market volatility, and they have been more anxious about their assets. They also want things done yesterday.”
• “They expect for us to be more productive and help them be more successful.”
• “Expect more personalized service and immediate response times.”
• “More technology and around the clock support.”
• “They refuse price increases and are constantly shopping the business.”

Artificial Intelligence

About a quarter of CEOs surveyed (26%) indicated their companies have begun to utilize AI tools in their operations, and almost half (47%) are exploring how AI tools could be used. Only 1 in 10 do not envision their company utilizing AI tools.

Companies using AI tools employ them for process improvements, business planning, and customer service, such as:

• “Financial analysis and modeling, predictive analytics, data mining.”
• “Customer experience optimization.”
• “Risk mitigation.”
• “Better align existing data to help us plug in gaps in our dashboarding.”

“The overall optimism we see in this survey is very encouraging. Now that the pandemic economy is behind us and companies have resumed full operation, CEOs are challenged to meet higher expectations from customers, who are also working hard to make up lost ground, while continuing to reinvest in the business,” said Jeffrey M. Weiner, Marcum’s chairman & chief executive officer.

“This certainly includes figuring out how to deploy new tools such as artificial intelligence to effectively position their companies for the future. Whether you’re a family-owned enterprise or a publicly traded company, ensuring you have a sound succession plan is critical for any business with an outlook beyond its current management team. If the C-suite is not confident in their current plan, their business advisors should be able to provide a thorough, objective assessment.”

The first Marcum-Hofstra CEO Survey of 2023 was conducted in February. 265 middle-market CEOs participated. Data compare to the previous survey in November 2022.

Said Janet Lenaghan, dean of the Zarb School of Business: “The pressure of the pandemic has abated, but in its wake, there are new forces to contend with, namely rising consumer demands and expectations. I think the uptick in CEO optimism is a reflection not only of their feelings about the economy, but their confidence in their own ability to be flexible and meet the moment, something they had to learn to get through COVID-19.”

About the Survey
The Marcum-Hofstra CEO Survey is a periodic gauge of mid-market CEOs’ outlook and their priorities for the next 12 months. The survey polls the leaders of companies with revenues ranging from $5 million to $1 billion-plus.

It is developed, conducted, and analyzed by Hofstra MBA students, led by Dr. Andrew Forman, associate professor of international business and marketing, in partnership with Marcum.

“The Marcum-Hofstra CEO survey provides students with an instructive lesson on balancing present concerns with long-range planning. Rising customer expectations present company leaders with an immediate challenge, while decisions regarding investment in new technologies, such as artificial intelligence, have a longer time horizon. Ultimately, company executives recognize the importance of planning for a handover to a new generation of leaders,” Dr. Forman said.

About the Frank G. Zarb School of Business at Hofstra University
Hofstra University’s Frank G. Zarb School of Business prepares students to become tomorrow’s global leaders. Located just 25 miles from New York City, Zarb students have access to internships and networking opportunities across every industry. The Zarb School combines entrepreneurial, hands-on learning and research with real-world experience and mentorship in state-of-the-art facilities, including a Behavioral Research in Business Lab, Center for Entrepreneurship, and academic trading room. Our undergraduate and graduate programs in accounting, management and entrepreneurship, marketing and international business, finance, and business analytics are ranked and recognized by US News & World Report, Princeton Review, Pets & Quants and Fortune Magazine.

About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.