Report: CFOs show growing confidence in U.S. economy
During the past year, chief financial officers (CFOs) have grown significantly more confident in the U.S. economy, according to the 2013 Spring CFO Survey from Grant Thornton LLP. The survey findings reveal that 45% of respondents believe the state of the U.S. economy will improve during the next six months, compared to just 31% in the fall and 25% last summer.
That confidence extends throughout the survey findings, with 44% of those surveyed predicting that industry financial prospects will improve during the next six months, compared to 34% in the fall. Since last summer, the number of CFOs who believe the pricing or fees charged by their industry will increase in the next six months has jumped seven percentage points to 37%. In addition, when CFOs were asked about employment opportunities during the next six months, more than a third (40% ) said their company’s head count would increase, rising 6% from the fall.
“The results of our spring survey are encouraging — particularly with respect to the uptick in expectations for improved financial prospects,” said Stephen Chipman, chief executive officer of Grant Thornton LLP. “Seemingly, steady improvements in key economic indicators, including labor and housing, have helped stimulate greater optimism among CFOs, at least in the near-term.”
According to the survey findings, almost two-thirds of CFOs (65%) expect the average cost of an employee’s salary to increase during the next 12 months, up from 59% in the fall. The total cost of employee benefits, including bonuses (56%), stock options (72%), 401(k) match (86%), and other company-matched retirement contributions (81%), are expected to remain unchanged from the year prior.
These findings come on the heels of similar data from the Grant Thornton International Business Report, which found that optimism in the performance of the nation’s economy among U.S. business leaders rose from -4 percent in fourth quarter 2012 to 31 percent in first quarter 2013.
While increased optimism among CFOs was prevalent throughout the survey results, they still cite legislative bottlenecks as an area of concern. Almost half of all CFOs surveyed (47 percent) say they are unable to make a major decision that would allow their company to grow because of uncertainty surrounding the funding of the U.S. government. Thirty-one percent of respondents ranked tax reform as the second greatest bottleneck.