U.S. financial executives are much more optimistic about the national
economy than they were last fall, with nearly two-thirds expecting it to
grow in 2012, but they remain cautious about the global economy,
according to the latest Bank of America Merrill Lynch CFO Outlook survey.
Of 251 executives surveyed recently, 63 percent said they expected the
U.S. economy to expand this year, up significantly from 38 percent in
the previous survey conducted in fall 2011. Only 4 percent expects the
economy to decline, down from 11 percent. CFOs gave the current economy
a score of 53 out of 100, up from 44 in the previous report. The global
economy received a score of 47, up slightly from 43.
CFOs’ optimism extended to hiring, with 51 percent expecting their
companies to add employees in 2012, up from 46 percent. Executives also
increasingly forecast higher revenues and profits this year, according
to the survey.
“Although challenges remain, CFOs clearly feel better about the economy
and opportunities for growth in 2012 than they did in late 2011,” said
Laura Whitley, head of Global Commercial Banking at Bank of America
Merrill Lynch. “With more executives expecting increases in revenues,
profits and personnel, it’s not surprising that optimism about the U.S.
economy as a whole is improving.”
As for barriers to business growth, government involvement was the most
popular response, chosen by 37 percent of CFOs, followed by weak
customer demand, domestic competition and operating costs. When
executives were asked how the U.S. government can encourage domestic
business growth, the top response was simplify laws and regulations,
chosen by 56 percent of CFOs, followed by change corporate tax policy,
reduce the budget deficit, and offer tax credits or incentives.
Other notable findings in the survey:
Regarding revenues, 64 percent of CFOs expect revenues to increase
this year, up from 56 percent last fall. In addition, 50 percent of
CFOs expect profits to grow, up from 41 percent.
The biggest potential impact on the economy is oil prices, chosen by
65 percent of CFOs – up from 40 percent last fall. In addition, 63
percent listed the effectiveness of U.S. government leaders as a top
concern, 54 percent listed the U.S.