Every quarter we publish a Business Barometer report on financial services executives’ expectations on revenue growth and cost pressures. In the first quarter of 2012, executive sentiment regarding revenues in the coming year improved compared to the last quarter, while expectations regarding cost pressures in the next 12 months remained similar.

In addition, we had some other interesting findings looking ahead to 2012:

Across financial services, executives expect relatively better operating margins in 2012. Sixty three percent of executives expect their company’s revenue to increase in the next 12 months, with 40% anticipating somewhat higher revenues. However, 67% of executives expect cost pressures to increase.
Compared to the previous quarter, more financial services executives expect sales to decline or remain steady. Executives expect sales will only somewhat increase in the following 12 months. During the same time period, investments are expected to flatten or increase somewhat. Almost half of respondents (46%) project research and development expenditures will remain unchanged.
Throughout 2012, financial services executives anticipate the same or lower headcount, the same or higher hiring volumes, and higher labor costs. Almost three-fourths (72%) of executives expect to maintain or reduce their companies’ staff. Furthermore, 68% expect increased labor costs. A higher proportion of executives anticipating a rise in labor costs is potentially indicative of higher compensation and benefits.

Most financial services executives expect to enjoy the same or easier access to credit along with unchanged interest rates in the next 12 months. While 36% of executives expect the same or easier access to credit, 61% anticipate no change in interest rates. These expectations indicate a relatively better credit environment compared to the previous quarter.