Private company confidence in the U.S. economy has climbed sharply in the wake of the presidential election, according to a new survey from PricewaterhouseCoopers.

PwC Trendsetter Barometer survey of private company executives in Q4 2016

PwC’s quarterly Trendsetter Barometer survey found that before the election private company optimism about the U.S. economy was at 38 percent in the third quarter, but after the election, optimism among executives jumped to 59 percent in the fourth quarter. Optimism about the world economy rose from 23 to 31 percent.

“The optimism levels really shot up after the election,” said PwC Trendsetter Barometer leader and partner Ken Esch. “You can see it in the change between the third quarter and the fourth quarter. That increased almost 20 percent. But even more dramatically in the fourth quarter surveys, the surveys that were completed before the election were about the same as they were in the third quarter. They were about 38 percent, but after the election 70 percent of the survey respondents were optimistic. So there was a dramatic change as of that election date.”

While the majority of private company executives were not expecting Donald Trump to win the presidential election, 70 percent believe it will benefit their business, while 66 percent anticipate it will benefit the overall economy. For the PwC survey, BSI Global Research interviewed 300 business leaders of large privately held companies with an average of $400 million in revenue.

The survey found that 78 percent of the private companies plan to increase their operational expenditures over the next 12 months, a post-recession high.

“Companies are continuing to invest in their business,” said Esch. “Even though the economy has not been growing as fast as they would like, that operational spending metric is one that we watch closely. We are seeing that they’re continuing to spend, even though there are headwinds in the economy.”

Of the private companies surveyed, 47 percent of the executives said they plan to hire in the next 12 months, up from the post-recession low of 39 percent in the third quarter.

“We’re happy to see that more companies are planning to hire, but wages are still stubbornly low,” said Esch. “We haven’t really seen the increases in wages that you might expect coming out of a recession, building into an environment where the unemployment rate is low.”

Even though the U.S. Bureau of Labor Statistics and the payroll company ADP have both reported some wage growth as the labor market tightens, Esch believes wages have remained relatively stagnant.

“What we’re seeing in the report is that the wages are only expected to increase about 2 percent over the prior period, which is probably lower than you might expect in an economy that’s growing more strong,” he said. “Some of that may be attributable to the number of people who maybe are not working but are of able body, for reasons unknown to us. If you look at the labor force participation rate, for example, it’s near historic lows, even though our unemployment rate is around 4.7 percent, which many people view as full employment. Until more people join the workforce and are actively participating, you may see continued wage stagnation.”

Despite the low levels of wage growth, companies are pushing for greater productivity. PwC found that 90 percent of the private companies in its poll said productivity is a top priority, up from 76 percent a year ago. Companies are investing more money in automation and robotics to boost productivity.

“We’re definitely seeing increased spending in the area of automation,” said Esch. “I think that is a function of the increased operational spending out there. So it’s technology and automation to boost productivity, and maybe not hiring as many people to get the work done. There’s a very steady theme out there of cost cutting, so they’re looking to do more with less.”

PwC didn’t poll respondents specifically about Trump’s policies, but it did hear in interviews about their expectations.

“We did hear from participants out there that they were optimistic about the new president,” said Esch. “It was surprising to many within the survey, just like we’ve seen within the broader population. Many felt it was going to be a positive development for their business as well as the overall economy. Some of the things that they cited were tax reform and reduced regulation.”

One of his clients is a company that manufactures goods in the U.S. and avoids outsourcing to foreign companies.

“They’re really performing that manufacturing operation here, and they’re very excited about what they’re hearing from Washington about tax reform,” said Esch. “They see that as a potentially significant reduction in their effective tax rate. And they feel that will give them opportunities to continue to invest in their business above what they’ve done in the past.”

Michael Cohn

Michael Cohn, editor-in-chief of, has been covering business and technology for a variety of publications since 1985.