Apple Gets All the Attention, but Private Companies Are the Real Economic Indicators

It’s not just about the Apples (AAPL), Facebooks (FB) and Googles (GOOG) of the world. Private companies are key economic indicators, according to PwC. ‘Private companies make up a very large segment of the economy,’ said Ken Esch, a partner at PwC. ‘They are ahead of the game with respect to hiring.’ Some 50 percent of gross domestic product and 65 percent of new job creation in the U.S. is driven by private companies, according to PwC, citing a Sageworks study in its report. ‘In short, if you get a proper reading on what private companies are thinking and planning for the next 12 months, you can get a good sense of where the economy overall is heading,’ PwC said in a LinkedIn (LNKD) post. The sentiment from private companies also ended up predicting the 2008 recession. ‘We looked back at previous years of our study, which has been conducted for 20 years and we found that business leaders who told us that they were pessimistic about the economy - when those numbers went up, it preceded what was going to happen in the recession in 2008.’ The economic landscape in recent months has been volatile. A strengthening dollar has hurt U.S. companies with overseas exposure. In fact, 28 percent of S&P 500 companies get more than half of their revenues from overseas, according to FactSet data. TheStreet’s Scott Gamm reports from New York.