More NewsUS CFOs More Optimistic About Hiring in 2011, Finds Survey

US CFOs More Optimistic About Hiring in 2011, Finds Survey

Financial executives at US companies expressed more optimism that their businesses will hire employees and see revenue growth in 2011, according to a recent Bank of America Merrill Lynch (BAML) survey.

Of the 801 executives surveyed in the bank’s annual CFO Outlook, 47% said they expect their companies to hire additional employees next year, up from 28% who forecast hiring last year. Only 6% said they expect layoffs, compared with 9% last year. In addition, 64% of chief financial officers (CFOs) expect revenue growth in 2011, up from 61% last year.

“Despite the challenging economic climate, many CFOs have growing confidence that their companies have weathered the worst of the storm and are poised for expansion,” said Laura Whitley, global commercial products executive at BAML. “Although concerns about the economy remain, the increase in CFOs who expect to hire employees could be crucial to improving the nation’s unemployment rate.”

Financial executives gave the current economy a score of 47 out of 100, up slightly from last year’s score of 44 – the lowest in the 13-year history of the annual CFO Outlook. Despite that improvement, CFOs weren’t as optimistic about US economic growth. Only 56% said they expect expansion in 2011, compared to the 66% of CFOs who forecast economic growth a year ago.

Other findings in the survey include:

  • When asked what will have the biggest impact on the economy in 2011, CFOs ranked healthcare reform first at 54%, followed by the budget deficit at 52% and the housing market at 43%.
  • Related to the above, CFOs’ top financial concern by far is health care costs, followed by revenue growth and cash flow. The top concern last year was revenue growth.
  • Only 27% of CFOs expect the cost of capital to increase, compared to last year when nearly half of CFOs expected a higher cost of capital.
  • Executives at manufacturing companies generally were less positive about their sector than CFOs at services and commodities companies, which include construction, retail, transportation, finance, education, health care and food service businesses. Only 47% of manufacturing CFOs predicted expansion their sector versus 58 %of CFOs in other sectors.

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