According to a fourth quarter survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business, optimism in the economy is coming from what many would consider the least likely source: chief financial officers.
"CFOs overall closed 2009 with a much improved sense of optimism than when it began, but they are realistic about the challenges that still lay ahead," said John Elliott, dean of the Zicklin School of Business at Baruch College. "CFOs are indicating that they have learned lessons from the downturn and can face the coming year looking forward to the opportunities at hand."
Highlights From The FEI/Baruch Survey.
• Net earnings expected to rise by 22 percent by the third quarter.
• Gross revenue anticipated to grow by 10 percent this year.
• Technology spending anticipated to increase by 6.1 percent.
• Inventory anticipated to increase by 2.5 percent, reversing reductions.
• Prices are expected to increase by 1.13 percent this year.
Where CFOs are more reserved is on employment. Nearly nine out of ten CFOs reported they are looking for efficiencies over new employees. Two-thirds said they would invest in technology; one-third said they planned additional restructuring.
Companies seem hesitant to hire new employes for several reasons, including cost containment (uncertainty of future costs associated with new employees); an increased emphasis on public perception (slower, more manageable growth); a shift from growth-orientation toward leadership-orientation (restructuring to serve a smaller, affluent base); and concerns over the current government administration. Sixty-four percent said the U.S. economic outlook has weakened since Obama took office.
