Business Owners 'Understandably Cautious' in Their Outlook for 2005, According to Forthcoming Study by J.H. Cohn LLP.

ROSELAND, N.J. -- After three years of difficult economic conditions, the nation's middle-market companies are understandably cautious in their outlook for 2005, according to a forthcoming study by J.H. Cohn LLP, a major accounting and consulting firm.

J.H. Cohn's Business Owners Checkup, a national survey reflecting the opinions of 164 chief executives and other senior officers, reveals that business owners are bullish on the prospects for their own companies, moderately hopeful about the U.S. economy, and divided in their views on hiring for 2005:

--Although 44% of the executives across the country who participated in this study say that the events of Sept. 11, 2001 had a negative financial impact on their businesses, 78% are upbeat about the prospects for their own companies in 2005.

--Nearly two-thirds (65%) are hopeful about the U.S. economy in 2005, but only 58% of the executives in the New York/New Jersey region are optimistic about the national economy in 2005, compared with 71% in other states around the country.

--Almost half (48%) expect to create jobs in 2005. Companies that describe themselves as in either the start-up or growing phase of their life cycle are more likely to add to staff (57%) than mature businesses (38%).

"Business owners are understandably cautious in their outlook for the economy because it is subject to so many factors beyond their influence, including consumer confidence, oil prices, foreign exchange rates, the specter of international terrorism, and global political stability," says Thomas J. Marino, chief executive officer of J.H. Cohn, the largest independent accounting and consulting firm in the Northeast.

According to the J.H. Cohn study, businesses owners cite three principal reasons why employment has lagged other measures that suggest the U.S. economy is improving:

--Gains in productivity have reduced the need to hire more people (38%).

--There is still too much pressure on profit margins to support hiring more people (29%).

--Businesses have been able to secure additional capacity through outsourcing (21%).

To gather executives' opinions for the Business Owners Checkup, scheduled for publication in mid-September, J.H. Cohn surveyed 164 middle-market companies by mail in May and June 2004. Nearly a third of the responding companies have annual sales of $75 million or more. About half have 100 or more employees. The margin of error for questions answered by the entire sample is 7.65%.

About J.H. Cohn

With more than $100 million in revenues, J.H. Cohn is one of the country's 15 largest accounting and consulting firms.

J.H. Cohn serves a variety of clients, with a special focus on construction, healthcare, manufacturing, distribution, real estate, family offices, entertainment, law firms, and financial services. In its multidisciplinary approach to client service, the firm recognizes that companies require different services at different stages of their life cycle in order to help their owners create, enhance and preserve wealth.

J.H. Cohn has offices in New Jersey, New York, California, and the Cayman Islands. Its headquarters are in Roseland, N.J. Worldwide, J.H. Cohn has associations through member firms of SC International and as a correspondent of Horwath International. The firm's Web site is www.jhcohn.com.