Portfolio Insights

Increasing Optimism into 2021: Q1 2021 CEO Survey

While the pandemic is still ongoing, the current macroeconomic outlook and sentiment from our surveyed portfolio company CEOs point towards a continued trend of optimism.

Each quarter, Blackstone surveys a diverse set of our portfolio company CEOs on their outlook for the economy and their businesses. In the first quarter of 2021, 51 CEOs participated representing companies predominately from North America, with some representation from Europe, Asia and Latin America, and across industries including real estate, financial institutions, consumer & leisure, transportation, industrials, technology, media & communications, service, and healthcare.

The survey includes input from 51 CEOs. The representation by geography, industry and business group are illustrated below.

Where we’re seeing growth. Sectors that have been disrupted by COVID-19 – such as energy (with battery storage solutions and renewables driving growth), industrial, consumer, and location-based entertainment – have begun to rebound. Within Blackstone’s portfolio, we have seen that larger, well-capitalized companies in “good neighborhoods” – fast-growing areas such as technology, life sciences and global logistics that are benefiting from secular trends – have been more resilient and are expected to continue growing strongly.

CEOs remain cautiously optimistic. Our surveyed CEOs expect strong growth in the latter half of 2021 and into 2022. Most respondents expect business conditions to be better by Q3 and over half expect 2021’s margins to exceed 2019 levels. A majority of respondents also expect to see their company’s employment levels to be greater at the end of 2021 relative to pre-COVID-19 levels.

While the outlook remains generally positive, surveyed CEOs believe hiring and retaining qualified workers may prove more challenging for their respective businesses with the possibility of wage inflation and higher input costs.

A look at the macroeconomic backdrop. With the Federal Reserve prioritizing high growth and full employment, the US GDP is expected to grow at a level unprecedented in decades in the next year. With households, corporations and state and local governments reporting record levels of cash on hand, the current economic expansion resembles a mid-cycle environment – but today’s fiscal and monetary policies are more typical of an early cycle, driving up demand and consumption as a result.

Certain information herein has been derived from surveys of certain Blackstone portfolio companies. Such surveys were not scientifically conducted and are not necessarily a representative sample of companies in Blackstone’s portfolio or across industries, geographies, or any other category or metric. The views expressed by the portfolio companies may be different if provided by different portfolio companies.