U.S. CFOs Optimism Decreases about Economy
According to the CFO Outlook Survey, conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business, Chief Financial Officers (CFOs) around the world, especially in the U.S., are uncertain about the economic future, their businesses and the expectation of recovery.
The study, done Nov.9-20, came from 180 corporate CFOs from the United States, 32 corporate CFOs from Italy and 20 corporate CFOs from France. The CFOs represented both public and private companies and were from a broad range of industries.
Respondents revealed that America’s CFOs have grown increasingly doubtful that the country will experience a recovery in the next year. When asked when they believed the U.S. economic recovery would take place, 53 percent believed a recovery would be delayed until at least 2014, a 15 percent increase from the previous quarter when just 38 percent predicted a recovery would remain that far out.
More than three-quarters of U.S. CFOs, 76 percent, reported that their expectations of U.S. economic growth will be impacted by tax increases and potential sequestration. Similarly, 74 percent of CFOs are bracing for the impact of the scheduled expiration of Bush-era tax cuts at the end of 2012. Sixty-seven percent of CFOs think Congress should postpone reductions mandated under sequestration and extend the Bush tax cuts for another six to twelve months, to give the next Congress and the Administration enough time to find a permanent solution to the fiscal crisis. Only 21 percent of U.S. CFOs believe Congress should allow sequestration to occur and the tax cuts to expire.
“Post-election, CFOs in the U.S. are expressing alarming concerns over the threat of a fiscal cliff and sequestration, which has a resounding impact on their prospects for economic growth,” said Marie Hollein, president and CEO of Financial Executives International. “Respondents to the survey seem to support the postponing of sequestration cuts and extending Bush tax cuts to avoid pushing the U.S. into a potential recession. With the timeline for a decision by the current Congress drawing closer, CFOs are growing more uncertain that the U.S. economy will recover in the near term.”
To view the entire survey findings, visit www.financialexecutives.org.