CFOs Show Cautious Optimism

Working Numbers

The CFO Outlook Survey saw CFOs are predicting changes in payroll numbers in 2002, with

· more than half expecting the number of employees at their company to increase next year, and
· some 45% expecting to have fewer employees.

On average, the CFOs expect employment to rise by 1.3%, while 93% of the sample expect wages and salaries at their company to increase next year,

· with a net average 3% rise in wages, and
· a decrease of 4.5% in overtime.

Bonus Blackout

Among CFOs at firms that usually give year-end bonuses,

· the majority, 45%, say the bonus payments will be dramatically lower, compared to 2000,
· a further 18% say bonuses will be slightly lower, and
· only 4% say that bonuses will increase dramatically.

Economic Indicators

On average, CFOs predict that 2002 growth in Gross Domestic Product will come in at 1.1% in 2002. Asked when they expect growth to resume,

· some 65% expect the recession to end in either the second or third quarter of next year,
· some 15% expect an uptick in the fourth quarter,
· slightly less expect growth to resume in 2003 or later, and
· only 6% expect the business cycle to turn over the next three months.

The survey also revealed that CFOs are more optimistic about the economy than they were last quarter, in fact

· some 46% are more optimistic,
· slightly less than a third are less optimistic, and
· just under a quarter of the sample report no change.

The CFO Outlook Survey interviewed 291 CFOs of US companies in first week of December.

– Camilla Klein                           editors@plansponsor.com