Fast-growing private companies hint at change in business climate.

CEOs of the nation's fastest-growing private companies may be signaling a change in the business climate. They are increasingly concerned about weak market demand, runaway energy costs and escalating interest rates, according to the new PricewaterhouseCoopers' Trendsetter Barometer.

And their optimism about the economy is fading. They have lowered their revenue growth targets, and turned more cautious in their investment plans. Gross margins remain a bright spot, however. According to the survey:

CEOs from 57% of surveyed companies are concerned about possible weak market demand over the next 12 months; 39% are worried about the impact of rising energy prices; and 36% are concerned about steadily-climbing interest rates, up from 29%.

With the Federal Reserve Board's most-recent rate increases, "Trendsetter" businesses are paying, on average, 61 basis points higher than in the prior quarter, and 208 basis points higher than a year ago.

Only 61% are optimistic about the domestic economy's prospects over the next 12 months and just 58% are optimistic about the outlook for the global economy.

"Growing numbers of these CEOs are expressing concern about sustainability of market demand and they are worried about steadily-rising costs," said Rich Calzaretta, national leader of PricewaterhouseCoopers' Private Company Services practice. "Little wonder that their optimism has faltered, and they have scaled back their revenue goals."

However, 32% of Trendsetter CEOs reported increased gross margins in the prior quarter, and 18% a decrease, for a net of 14% increasing--similar to the prior quarter.

"In today's increasingly uncertain business climate these CEOs are responding prudently," said Calzaretta. "If they can continue to keep spending under control and maintain their margins, they will have greater flexibility over the coming months."