US CFOs Less Optimistic about Economy
CHICAGO -- The U.S. economy will remain the same or worsen during the next six months, say 60% of the nation's chief financial officers polled. The results come on the heels of what had been a slow increase in confidence in the economy over the past year,
In the spring CFO Survey by Grant Thornton, 45% of respondents believed the economy would improve compared to 31% in the fall of 2012 and 25% in the summer of 2012.
“The declining confidence and uncertainty in the performance of our economy shouldn’t be surprising given the recent gridlock surrounding our nation’s budget and debt ceiling negotiations,” said Grant Thornton CEO Stephen Chipman. “It’s time for our country’s political leaders to embrace a long-term budget solution combined with comprehensive tax and entitlement reforms to remove the largest obstacles to business uncertainty and position the United States for a sustained economic recovery.”
Notably, 24% of CFOs in the latest survey cited funding the government and/or replacing across-the-board spending cuts, better known as “sequestration,” as their most important legislative priority, while 24% point to the need for reforming the tax code.
Uncertainty extends throughout the survey findings, with 56% predicting that industry financial prospects will remain the same or worsen, no change since the spring. The number of CFOs who believe the pricing or fees their industry charges will remain the same or decrease also remained the same from the spring at 63%. However, when CFOs were asked about employment opportunities in the next six months, 43% said their company’s head count would increase or significantly increase, a moderate 3% increase from the spring. In addition, 68% expect the average cost of an employee’s salary to increase during the next 12 months, up from 65% in the spring.
Published by The Business Journal, Youngstown, Ohio.
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