Optimism Continues to Rise among US CFOs
US financial officers (CFOs) gave the American economy its highest score in five years and were significantly more confident about economic growth in 2013 in Bank of America Merrill Lynch’s (BofA Merrill) latest ‘CFO Outlook’ survey.
Executives participating in the group’s mid-year update gave the US economy an average score of 58 out of 100, up from 49 in the previous survey conducted in late 2012. CFOs gave the global economy a score of 51, up from 45.
CFOs voiced even stronger optimism about economic growth, with 55% expecting expansion in 2013, compared with 39% in the previous survey. Only 10% now expect the economy to shrink, against 24% previously.
This confidence comes as more US companies do business abroad, with 76% of CFOs reporting some type of activity in foreign markets, from 73% in late 2013 and 67% one year ago, as more companies are buying from, selling to and establishing operations in non-US markets.
“Beyond their brighter view of the economy, CFOs and their companies remain focused on new markets and opportunities for international growth,” said Alastair Borthwick, BofA Merrill’s head of global commercial banking.
“While expanding into other countries is attractive, doing business globally brings many challenges and often requires a wide range of financial solutions. More than ever, US companies are seeking help with accessing capital, managing risk, maximising cash and increasing efficiency as they grow their businesses.”
Asked about potential impacts on the US economy this year executives overwhelmingly named health care costs, with 72% ranking it as a significant concern, up from 62% in the late-2012 survey and 51% one year ago. The cost of health care also was the top financial concern for CFOs’ own companies, with 70% ranking it a significant concern, up from 58% and 51% respectively; no other responses in the latest report were above 50%. The survey responses were taken before the recent announcement that the employer mandate in the Affordable Care Act (ACA) will be delayed until 2015.
Other notable findings in the 2013 CFO Outlook mid-year update: