On September 11 the September Duke/CFO Magazine Global Business Outlook Survey (pdf) was released. It contains a variety of statistics regarding how CFOs view business and economic conditions.
In this CFO Survey, I found the following to be notable excerpts:
U.S. CFOs are growing more pessimistic about the American economy, with hiring and spending plans significantly weakening since last quarter. Finance chiefs say that their business spending plans are not sensitive to moderate changes in interest rates, suggesting that there is little that the Federal Reserve can do to stimulate investment at this time. In addition, CFO concerns about Europe also have increased in the past three months.
The Federal Reserve’s attempts to reduce interest rates will have little impact on corporate investment, say CFOs. Ninety-one percent of firms say their spending plans would not change if interest rates were to fall by 1 percentage point. Eighty-four percent say a 2 percent rate reduction would not affect their spending plans.
Harvey called it “amazing that all the focus is on interest rates when they are already at 50-year lows. We also asked about the impact of increased borrowing costs. Nearly 94 percent of CFOs would make no change in their investment plans if borrowing rates jumped up by 1 percent.
Forty-four percent of U.S. CFOs say that have become more pessimistic about the economy, twice as many as the 22 percent that say they have become more optimistic. The Optimism Index decreased to 52 (on a scale from 0 to 100), down from 56 last quarter and 59 in the spring.
U.S. businesses list a number of concerns that have reduced their optimism, including the ability to maintain profit margins, the cost of health care, difficulty in attracting and retaining qualified employees, and maintaining employee morale. The list of external concerns is topped by weak demand for products, federal government policies, intense price pressure and competition, and global economic instability.
Corporate plans for earnings, spending and hiring all softened this quarter. Earnings for public U.S. firms are expected to increase 6 percent over the next year.
Hiring is expected to increase by 1.5 percent in the next year, down from greater than 2 percent growth reported in the last two surveys.
The CFO survey contains the Optimism Index chart, showing U.S. Optimism (with regard to the economy) at 52, as seen below:
Please Note – The above is abstracted from the EconomicGreenfield.com (published by StratX, LLC) post of September 17, 2012, titled “September 2012 Duke/CFO Magazine Global Business Outlook Survey – Notable Excerpts”
StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.
StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.