Concern for Health Care Costs Second to Fuel Costs for CFOs

November 30, 2005 ( - A recent survey found that the top three concerns of Chief Financial Officers (CFOs) for their companies are fuel costs, health care costs, and interest rates.

The 2005 Duke University/CFO Magazine Business Outlook Survey found that corporate optimism is at a record low, according to a news release. Nearly 39% of CFOs surveyed said they are more pessimistic about the national economy now relative to how they felt last quarter, while 32.1% say they are more optimistic. The level of optimism is down sharply from one year ago, when 54.2% of CFOs said they were growing more optimistic, according to the release.

The survey asked executives to choose the top three items, from a list of 15, that are concerns for their companies. CFOs report high fuel costs as their number one concern, followed by increasing health care costs and rising interest rates.

Campbell Harvey, professor of finance at Duke’s Fuqua School of Business and the founding director of the survey said in the release that also, “The CFOs see continued upward pressure on wages, salaries and benefits over the next year.”

In addition, the survey found that CFOs predict only modest employment growth for the coming year, and 20% say they expect to reduce employment. Fifty-three percent of US firms expect to increase employment this year. Respondents believe overall employment should increase 0.6% in the next 12 months, less than half the expected growth last quarter. Meanwhile, outsourced employment should increase at 40% of firms, with growth averaging 4.8%.

The survey asked chief financial officers from public and private companies globally about their expectations for the economy. It generated responses from 811 CFOs, including 401 from the US. Results mentioned are for the US firms.

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