Administration October 6, 2008

Benefits Pricing a Leading Concern with Credit Harder to Come By

October 6, 2008 (PLANSPONSOR.com) - With credit harder to come by and credit costs increasing, senior executives surveyed by Grant Thornton LLP ranked employee benefits as their number one pricing pressure concern.
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According to a press release, 55% of CFOs and senior comptrollers chose employee benefits as the pricing pressure about which they are most concerned, followed by energy (40%), raw materials (39%), and insurance (17%).

More than half (55%) of respondents say they have seen credit costs increase, while almost two-thirds (64%) say they have found credit more difficult to come by than one year ago. However, only 14% have had to return to bank credit because they could not access alternative financing structures, the press release said.

Regarding the overall economy, 47% of senior executives surveyed think the condition of the U.S. economy will stay the same over the next six months. Four in ten respondents think their own company’s financial prospects will improve by March, and 17% expect them to get worse.

Over the next six months, 42% of respondents expect their company to increase prices, while 51% expect no change. Forty-seven percent say their headcounts will remain the same, and 23% say their headcounts will decrease within the next six months.

Grant Thornton LLP conducted the national survey electronically from September 8th through September 19th, 2008, with 688 chief financial officers and senior comptrollers.

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