CFO Optimism Takes a Plunge, but Not a Double-Dip

Finance chiefs took a decidedly gloomy turn in September, as optimism levels and spending plans declined and hiring plans remained flat. Still, the numbers remain in positive territory and do not indicate that CFOs are retrenching due to fears of a double-dip recession. In the context of weak macroecomic numbers and concerns about Europe, finance […]

Corporate Outlook Brightens for 2011

Chief financial officers are becoming more optimistic as we enter 2011. The 481 U.S. CFOs that we recently surveyed rate their optimism about the U.S. economy at 59 on a scale from 0 to 100, up from 49 last quarter. This is the highest reading of the Business Optimism Index since September 2007, and nearly up to the long-run average of 60, indicating that the economy should improve in 2011.

Corporate Sector Needs Help Within 6 to 12 Months

The U.S. corporate sector is doing its part to help the economic recovery – for now. Earnings and capital spending increases are expected to hover around 10% in the next year. However, optimism about the future among financial executives has fallen back to near-recession levels, and the corporate sector says that it can only hold out for six to 12 months without improvement in the rest of the economy.

Economy Recovering Slowly but Not So Surely

In spite of ongoing financial problems in Europe and an oil crisis in the Gulf of Mexico, U.S. financial executives believe that prospects for their firms continue to improve – though slowly. The 535 U.S. CFOs that we recently surveyed rated their optimism about the U.S. economy at 57.5 on a scale from 0 to 100, up from 55.5 last quarter. This is the highest reading of the Business Optimism Index since September 2007, indicating that the economy should continue to improve. We quickly add, however, that the Index still remains below the long-run average of 60. 

Economy Slowly Improving but Risks Posed by Weak Employment and Tight Credit Remain

Finally, some good news. We recently surveyed CFOs of 620 companies in the U.S. and nearly 800 in Europe and Asia and found some encouraging signs. U.S. finance chiefs are finally loosening the purse strings: capital spending is expected to rise 9 percent, and tech spending, R&D, and advertising should all increase by about 4 percent. These are the largest expected increases in several years and indicate that the business sector has bottomed out and is improving. As further evidence, public U.S. companies expect earnings to increase by 14 percent.

Economy Slowly Improving but Risks Posed by Weak Employment and Tight Credit Remain

We recently surveyed CFOs of 567 companies in the U.S. and nearly 900 in Europe and Asia. The economic outlook of these finance chiefs has improved somewhat, but the fledgling recovery in the West is threatened by a bleak employment outlook and credit markets that are still tight, especially for small firms. The outlook in Asia is stonger, with few major threats. Around the world, optimism has improved from recession lows but still remains below its long-run average.

A Tale of Two Companies: Credit Market Conditions Stabilize for Some Firms and Worsen for Others

We recently surveyed CFOs of 540 companies in the US, and nearly 800 in Europe and Asia, to gauge the status of credit markets and the world economy. About one quarter of companies has been severely impacted by tight credit markets, and another third has been moderately affected.  These financially constrained companies are in a […]