Rival Survey of US CFOs from BoA Merrill Strikes More Cautious Tone than TD Bank Findings
A survey of financial executives at US companies conducted by Bank of America Merrill Lynch (BoA Merrill) is markedly less positive than a recent similar survey conducted by TD Bank.
According to BoA Merrill’s latest ‘CFO Outlook’ conducted by Granite Research Consulting, which polled 602 executives in its 15th annual survey, chief financial officers (CFOs) continue to be concerned about the state of the US economy, with only two out of five expecting growth in 2013. They gave it an average score of 49 out of 100, against 44 in the 2012 report, while the global economy registered a score of 45, up from 43 a year ago.
Optimism about economic growth remained muted, with only 39% of CFOs predicting expansion in 2013, compared with 38% last year. Perhaps more telling, 24% of executives said they expect the economy to contract this year, up significantly from 11% in 2012.
“It is clear that uncertainty continues to linger among CFOs, which is understandable given the broader economic issues both in the US and overseas,” said Alastair Borthwick, BoA Merrill’s head of global commercial banking. “Until they see solid evidence of stability, CFOs will be guarded in their optimism and growth plans. Expansion still is possible but may be limited in the short term to certain industries and markets.”
Despite concerns about contraction, most CFOs still expect their companies to avoid layoffs. Only 8% predicted a reduction in workforce during 2013, compared with 7% last year. Meanwhile, 48% said they expect to maintain the current number of employees, while 45% said they expected to hire employees. Both responses are similar to last year’s BoA Merrill survey.
One area of significant growth in the latest ‘CFO Outlook’ was international activity, with 73% of CFOs saying their companies are involved in non-US markets against 54% in the previous annual survey, and executives reported increased buying from non-US markets (62% against 47% last year), selling to non-US markets (55% vs. 34%) and operations in non-US markets (30% vs. 15%).
Other notable findings in the 2013 ‘CFO Outlook’: