PwC US’s Private Company Trendsetter Barometer survey found that in the fourth quarter of 2012, privately held businesses selling internationally, especially those in emerging markets, forecast higher growth rates than private companies that sell solely in the United States. The projected growth rate for these international Trendsetter companies rose to 9.3 percent (up from the third quarter's 8.5 percent). Private companies selling in the key emerging markets of China, India, and Brazil forecasted an even higher 9.7 growth rate for the next 12 months.
Taken as a whole, however, the Trendsetter companies we surveyed in the fourth quarter (including domestic-only companies) said they expected a decline in their rate of growth for the next 12 months. Their expected rate of growth fell to 7 percent, down from 8.6 percent reported in the third quarter and 8.5 percent reported a year ago.
Private Companies Continue Spending; Bank Loan Activity Picks Up
More than two-thirds (67%) of Trendsetter companies plan to increase their operational spending over the next 12 months. International private companies, especially the 48 percent selling in the emerging markets of China, India and Brazil, remain well ahead of their domestic-only peers in this regard. More than three-quarters (79 percent) of Trendsetter companies operating in China, India and Brazil plan to increase operational spending, compared with 74 percent of international companies overall, and 61 percent of domestic-only companies.
Information technology continues to rank at the top of the list of spending areas for Trendsetter companies overall (reported by 28 percent), though fewer companies plan to increase their IT spending compared with those reporting that intention a year ago (40 percent).
Additional top areas of increased spending include new product or service introductions (27 percent) and marketing and sales promotion (23 percent).
International private companies also lead their peers in planned major capital investments over the next 12 months: 47 percent of international companies operating in emerging markets are planning to invest in major capital projects, versus 42 percent of international companies overall and 27 percent of domestic companies.
As private companies continue to plan increases in their operational spending plans, they're also increasing their banking activity, with 14 percent of private companies reporting financing activity in the fourth quarter of 2012 (up three points from the previous quarter). Twelve percent reported new bank loans, with the mean interest rate paid on loans by these companies hitting a low of 3.46 percent, 44 basis points below a year ago (3.90 percent).
Read the full PwC US’s Private Company Trendsetter Barometer including data charts and graphs.