The growth rate is surprising considering 47% of companies anticipate a reduction in the number of employees in the next 12 months, while only 32% expect to hire more employees and 21% plan no net change. However, a net increase was reported due to overall gains outweighing expected reductions, according to the latest release of the Financial Executives International (FEI) and Duke University Fuqua School of Business March 2003 CFO Outlook Survey.
With net employer rolls projected to increase, it is not surprising that CFOs say that their companies will continue to cut overtime during the coming year, by an average of 0.99%. Additionally, with more workers on the payroll, wages are expected to rise by only 2.8% during the next 12 months.
Elsewhere, CFO predictions of health care did not bode well for the budget conscious. The survey reported expected increases of 12.2% during the next 12 months.
Overall, CFOs predicted that GDP would increase a modest 1.7% in the coming year. This figures was supported by nearly nine out of 10 CFOs and represents a reduction in the 2.4% annual GDP growth predicted in the December 2002 survey.
These results were further consistent with the 45.1% of respondents expressing less optimism about the US economy in the current quarter when compared to the last quarter. When asked about the economic prospects of their own companies in the current quarter, a similar 39.4% responded to being less optimistic.