CFOs of American companies' economic confidence plunged more than 10% since last quarter, moving to 19% below where it stood at this time last year, according to a recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business

In the 2007 fourth quarter "CFO Outlook Survey" the CFO Optimism Index for the U.S. economy was 56.26, dropping significantly to fall even further past last quarter's three-year low of 62.85. This quarter, nearly 100 percent of the CFOs are as concerned, or more, about recession than last quarter, while over 95 percent report being as concerned, or more, about inflation than they were last quarter.

CFOs' outlook toward their own companies decreased again this quarter, as the Optimism Index of CFOs' own companies sank to 70.26, 1.4 points lower than last quarter's 71.68, which itself was a three-year low.

Top Election Issues

CFOs cited the economy as the issue of utmost importance when evaluating prospective Presidents. When CFOs were asked what, in their view, were the top priority issues when evaluating the 2008 U.S. Presidential candidates, 72 percent selected the economy. The second and third most frequently-cited priorities were the war in Iraq and taxes, which were each cited by 34 percent of CFO respondents. Other responses in descending order were terrorism (19%), healthcare costs (17%), immigration (11%) and social security (5%).

"It is clear that the state of the economy is the number one thing on everyone's mind, and CFOs of course are no exception, from how they will choose the next leader of our nation, to what keeps them up at night," said John Elliott, Dean of the Zicklin School of Business at Baruch College. "Volatility in the financial markets and crisis in the credit industry, paired with weakness of the dollar have led to real and immediate concerns by CFOs about recession and inflation."

2008 Economic Worries

CFOs believe the top economic worries for 2008 are economic growth and consumer spending. Over 47 percent of those CFOs surveyed consider economic growth to be the biggest economic worry. Consumer spending and demand was the second most selected economic worry, cited by 30 percent of CFOs. Interestingly, while topping the list of priority issues with regard to selecting a presidential candidate, the Iraq War did not top CFOs' list of
economic worries, with only 0.6 percent of respondents believe the Iraq War will be a top economic worry in 2008.

"It appears we have moved from a position of possibility to one of certainty as continued signs of weakness permeate the U.S. economy," said Michael P. Cangemi, FEI President and CEO. "We are dealing with one of the toughest economies in the last decade and CFOs have certainly had their finger on the pulse as we have watched their optimism towards the U.S. economy continue to drop nearly twenty percent over the past four quarters."