CFOs US Optimistic, But Globally Guarded: FEI/Baruch Survey

Financial leaders in the U.S. saw one of the biggest quarterly jumps in optimism but they remain wary of the minefields of health care costs and economic growth in Europe, according to the latest survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

The "CFO Outlook Survey,” — now in its 12th year and released today— polls CFOs of public and private businesses in the U.S. regarding economic and business confidence and expectations.

“Optimism regarding the U.S. economy is the highest our survey has seen in two years, and despite some challenges, CFOs have a positive outlook for their growth opportunities for 2014,” said Linda Allen, Professor of Economics and Finance, Zicklin School of Business at Baruch College in a statement. “In contrast to the dramatic increase in optimism regarding the U.S. economy, however, CFOs’ outlook for the global economy is relatively stagnant, reflecting economic uncertainty and political unrest in many regions abroad.”

According to the survey:

  • U.S. CFOs’ optimism about the U.S. economy saw the biggest improvement over the previous quarter, reflected by the quarterly optimism index which saw more than ten percent growth over the previous quarter, jumping almost six points to 62.0 (from 56.2 in Q3).
  • Respondents are anticipating a 17 percent increase in net earnings over the next 12 months, which is offset by the 11 percent increase they expect in healthcare costs.
  • CFOs also expect a ten percent increase in both technology spending and revenue. Businesses also appear to be making plans to unleash capital investment, notably expecting an eight percent increase in capital spending compared to their projections for a two percent increase last quarter.
  • CFOs sustained their concern over the future of the Eurozone. When asked to rate their concern on a scale of one (not concerned) to five (very concerned), this quarter more than half of all U.S. CFOs (70%) selected a "three or higher.”
“U.S. CFOs’ outlook and concerns about employment has always been a central part of our polling, and the trends in this quarter’s results are indicative of the progress in broader U.S. economic growth,” said Marie N. Hollein, President and CEO of FEI. “While the unemployment rate has eased, and CFOs continue to report on plans to hire and retain talent, more U.S. CFOs see healthcare costs as one of their top business concerns. Given CFOs’ expectations of continued increases in healthcare costs, we continue to believe this will be one of the closely watched areas for American businesses.”