E&Y, WSJ & CFO Agree: Slower Growth is The New Normal

A recent E&Y report was especially sobering. It concluded that after 2-3 years of “recovery” it will be more difficult for companies to generate growth in the months and years to come. In E&Y’s words:

“Our research ….. suggests there is not going to be an early return to the business conditions that drove growth in the past decade. The economic forecast for the coming years is for a slow recovery and some slowdown even in the faster growing emerging markets, as demand in developed markets remains weak. To grow and succeed in such an environment will require that companies intensify their competitive efforts…Most growth will have to be won from competitors.”

The E&Y growth related study can be found on their web site at:


Two articles posted today showed that the E&Y’s study was prescient. Today, the WSJ reported on the IMF’s decision to further lower its projections for US and worldwide growth in 2013. That IMF projection did not even include any effects that could arise from the idiocy playing itself out in Washington and the potential for a default on US debt. The WSJ article can be found here:


Finally, CFO magazine reported today that the rate of growth expected for private companies in the US will be only 1/3 the rate of the last 2 years:


The bottom line for US companies, Private Equity sponsors and other stake holders is: If you and your companies are counting of top-line related growth in 2013 and beyond, you had better have an alpha growth plan in place because there will be no wave of beta growth to ride.