SPECIAL COVERAGE: UNDERSTANDING OUTSOURCING

MARCH 9, 2004

Chief Executives Plan
To Send Work Overseas

By RICHARD BREEDEN
Staff Reporter of THE WALL STREET JOURNAL

About 27% of the chief executive officers of small and midsize businesses will be outsourcing part of their companies' operations overseas this year, or within the next three years.

According to a first-quarter survey by TEC International, a San Diego-based organization of CEOs, manufacturing operations are the most frequently outsourced overseas, followed by information technology work. Of the 1,091 CEOs responding to the February survey, 20.7% said that their businesses had functions that would be outsourced overseas in the next 12 months, while 6.3% said they weren't outsourcing this year, but would within the next 36 months.

Of the chief executives polled, 70% expect the economy will be the No. 1 issue in the presidential election; Iraq was cited by 11%, followed by terrorism, 7.8%; foreign policy, 6.1%; health care, 3.9%; while education was chosen by only 0.2% of the CEOs.

Expectations for hiring continue to be positive, with 62% of the CEOs intending to increase total employment, 33% expecting it will remain the same, and 6% seeing a decrease. TEC's CEO confidence index slipped by 1.5% during the first quarter, after running up cumulative gains of 15.6% in the past two quarters.

In matters of physical, rather than corporate, fitness, 11% of the chief executives said they were on the Atkins diet, and 22% said they had tried it in the past.