Contact: Mark Panus, Duke-Fuqua, (919) 660-2903 or Chris Allen, FEI, (973) 898-4658




DURHAM, N.C., March 29 — Small firms will continue to grow faster than the rest of the U.S. economy in 1999, according to the latest Financial Executives Institute / Duke University Corporate Outlook Survey. The CFOs for 131 small companies (sales less than $100 million) predict that their earnings will grow by 17.4% in 1999, in comparison to earnings growth of 14% for the 240 larger companies in the survey.


"One reason for the success of small firms is that they use the Internet more intensely than do larger firms," notes Duke University finance professor John Graham, director of the survey. "In 1998, Internet sales represented 1.7% of all sales for small firms surveyed, and this number will increase to 4.3% in the year 2000. Larger firms surveyed earned 1% of total revenue over the Internet in 1998 and expect this number to increase to 3.8% next year."



The executives of small firms expect that the prices of their products will rise by 1.3% in 1999. In contrast, medium-sized firms (sales between $100 million and $1 billion) expect price increases of 0.8%, and the largest firms (sales greater than $1 billion) expect price increases of only 0.1%.


Wages and Health Care Costs

Small firms predict that the wages and salaries they pay to their employees will increase by 4.6% this year, in comparison to a 4% increase for larger firms. In addition, health care costs will increase by 7.8% this year for small firms and increase by 5.8% for larger companies.



Employment growth will remain strong in 1999 with small firms hoping to increase their number of employees by 5.4% in 1999. Larger firms expect to hire 3% more employees.


Capital Expenditures

Small companies in the U.S. economy also plan to expand their capital investment in 1999. The executives of small firms plan to increase capital expenditures by 13.2% in 1999, compared to an increase of 5.7% for the larger firms surveyed. Micro firms (sales less than $25 million) will increase capital expenditures by 14.5%.


About the Survey

The survey is conducted quarterly by FEI and Duke University’s Fuqua School of Business. Each survey polls a broad cross-section of CFOs from over 3,000 U.S. companies. The current survey was conducted during the week of March 15, 1999. Complete survey results are available on the Internet at:


About FEI and Fuqua

Financial Executives Institute is the leading advocate for the views of corporate financial management. Its 14,000 members hold policy-making positions as chief financial officers, treasurers and controllers at 8,000 companies throughout the United States and Canada.


The Fuqua School of Business at Duke University was founded in 1970. Fuqua’s mission is to provide the highest quality education for business and academic leaders and to promote the advancement of the understanding and practice of management through research.