Food industry execs optimistic about business in 2010, says KPMG

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Beverage industry, Economics, Us

Employment prospects and revenues in the US food and beverage industry are likely to improve next year, predict most executives in the sector, according to a national survey from tax advisory firm KPMG.

The survey examined the expectations of 400 CEOs and high-level executives across a number of industries including food and beverage, and found “strong optimism”​ for improved business conditions in 2010, although only around half said they thought US economic recovery would be substantially completed by the end of next year.

Executives in the food and beverage industry said they thought the most important triggers for recovery were improved consumer spending, consumer confidence, and more employment.

Seventy-two percent said they expect business conditions to improve next year, while 86 percent said they thought the jobs picture will improve in 2010.

KPMG's consumer markets and US sector leader for food, drink and consumer goods Pat Dolan said: "These results show a cautiously optimistic outlook from industry execs, even as the underlying volatility in the food and beverage sector continues to develop based on companies wrestling with the sting of higher costs, shrinking consumer spending and working capital constraints.”

Six in ten said they thought the food and beverage industry would recover ahead of the rest of the US economy, but although the sector has certainly been less hard hit than other parts of the economy, analysts have suggested that that may not necessarily translate to a faster recovery.

Considering executives’ belief that consumer confidence and spending are vital to recovery, those in the food and beverage industry will be keeping a close eye on the Consumer Confidence Index, which surveys 5,000 US households about their opinion of overall economic outlook each month.

The latest data show a decline in consumer confidence over the past two months, after it had increased steadily during the first half of 2009.

Related topics: Markets

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