“Despite the challenging economic climate, many CFOs have growing confidence that their companies have weathered the worst of the storm and are poised for expansion,” said Laura Whitley, Global Commercial Products executive at Bank of America Merrill Lynch, who oversees the delivery of debt, treasury and liquidity solutions to more than 140,000 commercial and institutional clients. “Although concerns about the economy remain, the increase in CFOs who expect to hire employees could be crucial to improving the nation’s unemployment rate.”
Financial executives gave the current economy a score of 47 out of 100, up slightly from last year’s score of 44 – the lowest in the 13-year history of the annual CFO Outlook. Despite that improvement, CFOs weren’t as optimistic about U.S. economic growth. Only 56 percent said they expect expansion in 2011, compared to the 66 percent of CFOs who forecast economic growth a year ago.
Other notable findings in the survey:
- When asked what will have the biggest impact on the economy in 2011, CFOs ranked healthcare reform No. 1 at 54 percent, followed by the budget deficit at 52 percent and the housing market at 43 percent.
- Related to the above, CFOs’ top financial concern by far is health care costs, followed by revenue growth and cash flow. The top concern last year was revenue growth.
- Only 27 percent of CFOs expect the cost of capital to increase, compared to last year when nearly half of CFOs expected a higher cost of capital.
- Executives at manufacturing companies generally were less positive about their sector than CFOs at services and commodities companies, which include construction, retail, transportation, finance, education, health care and food service businesses. Only 47 percent of manufacturing CFOs predicted expansion their sector vs. 58 percent of CFOs in other sectors.
