Administration January 9, 2004

Some CFOs See Cause for Economic Optimism

September 25, 2002 (PLANSPONSOR.com) - The US economy may still be on the rocks, but a new poll found 63% of corporate chief financial officers more optimistic than, or of the same mind as, they were in the second quarter.
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However, the survey by Financial Executives International (FEI) and Duke University’s Fuqua School of Business, found other CFOs seeing more storm clouds ahead (37%).

Storm clouds or not, the majority of CFOs do not expect the US to dip back into a recession – only about a 35% chance. The CFOs call for 2% GDP Growth, down from their 3% prediction last quarter.

Economic Demons

The biggest demon among the CFOs polled is Americans’ confidence:

  • 42% say that they are most concerned about consumer confidence and consumer spending
  • 20% mention global unrest and the risk of terrorism
  • 13% point to lack of capital spending
  • 12% say the stock market decline

The CFOs were also aware of some positive economic factors; 57% say that the resilience of the American economic system makes them feel most confident about future prospects.

Interest rate levels was the second most frequently cited positive factor selected by 17% of survey respondents as making them most confident about the future.

Some 45% of CFOs say they are more optimistic about their own companies’ prospects this quarter, but this percentage is down from last quarter’s 54% who felt more optimistic about their companies.

The CFO Outlook Survey, conducted by Financial Executives International and Duke University’s Fuqua School of Business, interviewed the CFOs of US companies electronically the third week of September. Some 397 CFOs from both public and private companies from a broad range of industries, geographic areas and revenues responded.

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