North Carolina Executives Bullish on Business Prospects and Outlook for the State Economy, KPMG Survey Finds; Respondents Predict Increased Hiring, Ca

CHARLOTTE, N.C., April 27 /PRNewswire/ -- North Carolina business executives expect improved company performance in the coming year and are optimistic about the state's economy, according to a survey by KPMG LLP, the U.S. audit, tax and advisory firm.

Sixty-seven percent of 103 business executives in KPMG's 2007 North Carolina Business Climate Survey expect better business performance in the year ahead, while 29 percent expect it to be the same. Only three percent said business performance will be worse.

In looking at the prospects for the state economy, 58 percent feel that it will improve, 32 percent expect it to be about the same, and only six percent expect it to get worse. Executives expressed far higher levels of optimism for the local economy compared to the national economy. In fact, 38 percent expect improvement in the national economy, 43 percent say it will perform about the same, and 17 percent expect the national economy to worsen.

"Strong economic sentiment combined with bullish business predictions translate into very good news for our state," said Paul Chapman, managing partner of KPMG's Charlotte office. "Our survey found the executives expressing high levels of business optimism and confidence and, as a result, they will be investing in their businesses in the year ahead, which is very encouraging news."

With respect to hiring in the coming year, 49 percent of the North Carolina executives interviewed expect to increase their number of employees. Only three percent foresee a decrease. The KPMG survey also found that 43 percent of the executives are planning to increase investment in new products, and 54 percent expect an investment increase in capital improvements and technology.

According to the survey results, the executives say their CEOs are focused on "business expansion to improve long term growth," at 39 percent, and "improving employee morale and productivity", at 28 percent. Also, 33 percent said it was likely that their firms will make a major acquisition in the next two years. "It is clear from the survey findings that North Carolina executives are investing in their businesses and taking the long term view," said KPMG's Chapman.

As to when the executives feel that company profitability will be at its greatest, 28 percent indicated 2008, with 18 percent expecting it in 2007. Another 16 percent said in 2010 and 12 percent in 2009.

In addition, 81 percent were positive about the state's overall quality of life, with only two percent saying it was a negative. And 97 percent of business executives felt that the Carolinas is an attractive location for businesses to relocate to and 92 percent said they would recommend the Carolinas for economic development/expansion.

When asked if they intended to relocate their firms in the next 12-24 months, while 76 percent indicated that they will definitely not move, many others at least left the door open to relocating. "With the increased hiring and expansion intentions, some executives will feel the need to at least investigate new quarters," said KPMG's Chapman.

The executives in the KPMG survey expressed higher optimism on a number of other factors of conducting business in the state. For example, 53 percent viewed the quality of the North Carolina employment pool as positive, while 10 percent cited it as a negative. Fifty-six percent rated the suitability of North Carolina office space as positive versus three percent who had a negative view.

As to negatives of conducting business in the state, 40 percent viewed the state and local tax situation as negative, versus 16 percent who felt it was positive. While 35 percent felt positive about the state's transportation system, 23 percent had a negative view. And 63 percent felt that high gasoline prices had a negative impact on their businesses.

About the Survey

The KPMG survey polled 103 executives from North Carolina-area companies of various sizes covering a range of industries. The survey was conducted for KPMG by Penn, Schoen & Berland from March 6 to March 8, 2007.

KPMG LLP, the audit, tax and advisory firm ( http://www.us.kpmg.com/ ), is the U.S. member firm of KPMG International. KPMG International's member firms have 113,000 professionals, including 6,800 partners, in 148 countries.

CONTACT: Abe Abrams of KPMG LLP, +1-201-307-8186

Web site: http://www.us.kpmg.com/

SOURCE KPMG LLP http://www.prnewswire.com