Entrex PCI/Gazelles Index Graph
According to the Entrex Private Company Index (PCI)/Gazelles Index the slowed U.S. economy is beginning to affect high-growth private companies that, up until now, had reported a general growth trend for 2008. The Index dropped 1 percent in June based on the June over May revenue performance of portfolio companies.
The PCI/Gazelles portfolio, consisting of high-growth private companies segmented from the overall Entrex Private Company Index (PCI), tracks revenue trends in the sector of companies with annual revenue up to $250 million and represents a diverse collection of industry sectors.
Entrex CEO Stephen H. Watkins said, “The 1 percent drop, however small, indicates that even historically high-growth companies are currently feeling some pressure from economic conditions. Based on historical performance, one presumes these companies have stable sales practices in place and have been resilient during past periods of economic pressures, but can still be impacted by an overall spending slowdown in their industry sectors.”
While half of the companies listed on the PCI/Gazelles Index saw a decline in revenue in June, the other half were up, according to Watkins.
Only a small number of companies saw declines in both May and June. “The risk of revenue decline is present in a broad range of industry sectors right now,” added Watkins, “and some companies can manage their way out of it.”
“We’ve definitely seen an uptick in requests for information on how to drive revenues” notes Verne Harnish, CEO of Gazelles, co-sponsor of the Gazelles Index. “I believe CEOs are acutely aware of the need to keep a focus on sales and U.S. growth firms are more interested, than they’ve been in the past, in expanding internationally given the dollar advantage and growth rate in developing countries.”
The June PCI/Gazelles Index figure coincided with the overall Entrex PCI, which saw a 1.9 percent slide in June over May revenues. This drop also coincides with the U.S. Leading Economic Indicators reporting a continued drop in key indicators for the second month in a row.
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