Even customarily cautious chief financial officers and certified public accountants are feeling more upbeat about the economy these days, according to data from two surveys released Tuesday.
This story first appeared in the May 12, 2010 issue of WWD. Subscribe Today.
Results from the American Express/CFO Research Global Business and Spending Monitor show growing optimism about the economic recovery, although respondents said caution will mean initial outlays in spending will focus on categories deemed most likely to boost growth and product development, as well as select discretionary areas such as marketing and technology.
“We’re seeing a significant shift to a more positive outlook among finance executives as companies have moved from simply surviving the present to investing in growth for the future,” said Gunther Bright, senior vice president of the global client group at American Express.
The survey polled 479 senior finance executives from North America, Europe, Asia and Australia.
About 71 percent of respondents anticipate economic expansion in their respective countries over the next 12 months, a result American Express said represents the highest percentage in the three years the study has been conducted. In addition, nearly two-thirds of those polled said they plan to increase staffing in the next 12 months, and 31 percent expect to increase investments in mergers and acquisitions activity to drive growth.
However, 85 percent of those surveyed said they anticipate a continued focus on cost control, while 79 percent expect to maintain cash and working capital management discipline over the next two years.
In a quarterly economic outlook from the American Institute of Certified Public Accountants and the University of North Carolina’s Kenan-Flagler Business School, 51 percent expressed greater confidence in the prospects for their organizations versus 23 percent in the last quarterly report. The 28 percent swing represented the largest shift in sentiment since the fourth quarter of 2007, when the trend was reversed as views on the economy soured in the run-up to the recession.
Similar to the American Express survey, the respondents expect gradual expansion in spending and hiring. Optimism was strong for firms in the agriculture, manufacturing, wholesale, transportation and technology sectors. A higher level of pessimism remained among those whose firms are in construction, real estate and health care.
And, in another sign the turnaround will be slow and lengthy, 63 percent said U.S. business conditions would not return to pre-recession levels until 2012 or later, while 31 percent pegged the return in 2011.