Survey: CFOs See Stability in U.S. Economy’s Near Future

by Mike Hunter

Nearly 70 percent of chief financial officers of U.S. companies believe the U.S. economy will either improve or remain stable during the next six months, according to the recently released 2012 Fall CFO Survey from Grant Thornton LLP. The survey findings reveal that 39 percent of respondents believe the state of the U.S. economy will remain the same in the first half of 2013, while 30 percent believe it will improve. The latter is a 5 percent increase from the firm’s 2012 Summer CFO Survey, while the percentage expecting it to worsen also rose, from 21 percent to 31 percent.

The high expectation of stability extends throughout the survey findings, with CFOs predicting industry financial prospects (42 percent), pricing or fees charged (51 percent) and head count (49 percent) will all remain the same in the next six months.

Of headline issue “the fiscal cliff,” 60 percent of respondents reported they did not consider the uncertainty of its resolution an obstacle to making business decisions. “The turbulent years of the recent past have made businesses more adept at managing through economic uncertainty,” says Stephen Chipman, CEO of Grant Thornton. “It is reassuring to see that CFOs are confident that we will not take any steps backward in our progress.”

Beyond simply remaining the same, it’s also encouraging that 34 percent of respondents believe industry financial prospects will improve, 35 percent believe pricing or fees charged will increase, and 34 percent say head count will increase. In addition, according to the survey findings, CFOs are committed to keeping several employee benefits the same as last year, including bonuses (55 percent), stock options (69 percent), 401K match (85 percent), and other company-matched retirement contributions (82 percent). On a positive note, 59 percent plan to increase salaries.

“While many companies don’t foresee the economy taking a turn for the worse in the next six months, there is still an absence of improving economic conditions that are needed to propel our country into growth mode,” Chipman adds. “Only 34 percent of companies expect their financial prospects to improve in the next six months, which means that reluctance to increase hiring and make capital investments will continue to bog down our economy.”

State of the Economy Is Viewed Positive 
CFO’s give their six-month take on the economy

What change, if any, do you expect to see …

… in the U.S. economy?
1% Significantly Increase/Improve   29% Increase/Improve   39% Remain the same
28% Decrease/Worsen   3% Significantly Decrease/Worsen

… in your headcount?
2% Significantly Increase/Improve   32% Increase/Improve   49% Remain the same
16% Decrease/Worsen   1% Significantly Decrease/Worsen

… in your industry’s financial prospects?
2% Significantly Increase/Improve   32% Increase/Improve   42% Remain the same
22% Decrease/Worsen   2% Significantly Decrease/Worsen

… in the pricing or fees charged by your industry?
1% Significantly Increase/Improve   34% Increase/Improve   51% Remain the same
13% Decrease/Worsen   1% Significantly Decrease/Worsen

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