Executives blame oil price for slow growth

Executives of leading U.S. corporations expect their growth to slow over the next year, and many think rising oil prices are part of the reason. That’s among the conclusions of a quarterly survey of 147 chief financial officers and other top managers of U.S.-based multinationals.

The PricewaterhouseCoopers survey says the executives expect revenue growth of 8.1 percent during this calendar year, compared with an increase of 10.1 percent in 2004. A third of the survey participants, and nearly half of those in the manufacturing sector, cited rising oil prices as a factor.

For the first quarter, 47 percent of executives reported increased costs at their companies, compared with 21 percent who said their costs went down. Meanwhile, 46 percent of the companies boosted their own prices, compared with just 12 percent who cut prices for their products.

“The economy appears to be stuck in neutral, waiting for oil prices to stabilize,” said John O’Connor, vice chairman of PriceWaterhouseCoopers LLP. “Companies that are vulnerable to rising oil prices expect notably slower growth, and report weaker margins and considerably more cost increases.”

But the executives still see the glass as half-full, with 77 percent optimistic about the U.S. economy and 67 percent bullish on the world economy. Only 3 percent are pessimistic on each of those issues. And 57 percent expect their company’s workforce to grow, compared with 10 percent who expect to have few workers at the end of the year.

More information on the survey and others by the firm is available at www.barometersurveys.com

—Allen Baker