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CFO survey finds less optimism about US economy

November 20 2013

Chief financial officers remain moderately optimistic in their outlook for the global economy but are less optimistic about opportunities for their businesses and the U.S. economy, according to the quarterly CFO Outlook Survey conducted by Financial Executives International and Baruch College’s Zicklin School of Business. CFOs globally continue to face concerns including headcount reductions and the stability of the Eurozone, while U.S. CFOs also have concerns surrounding the Affordable Care Act and a resolution to the debt ceiling, the survey found.

The survey’s U.S. CFO optimism index toward financial prospects for their businesses fell to 65.1 from 70.7 in the second quarter, the lowest position of the index over the past four quarters. The CFO optimism index for the U.S. economy also dropped five points from the previous quarter to 56.2, down from 61.2 in the second quarter, but remained steady for the global economy, increasing less than a point.

The survey found 65 percent of U.S. CFOs and 35 percent of EU CFOs plan to hire additional staff in the next six months, mainly professionals at the entry- and mid-career levels. However, 28 percent of U.S. respondents and 31 percent EU respondents said they were forced to reduce headcount at their companies over the last year.

Half of U.S. CFOs now believe the U.S. is already in the midst of a recovery but they continue to express concerns over the impact of healthcare regulations. On average, CFOs experienced a five percent increase in healthcare-related costs from the ACA in the past six months. Fifty-nine percent of U.S respondents expect to increase employee co-pays because of the new healthcare regulations, and 44 percent expect that they will reduce the quality of the healthcare package or reduce benefits for their employees. However, only 14 percent of U.S. respondents said that they were considering changes to their workforce — such as layoffs or furloughs — as a result of the ACA. Eight-eight percent of U.S. respondents do not have plans migrate employees or retirees to state or private exchanges.

“New healthcare regulations are likely a major cause of U.S. CFOs’ decreased optimism in their business prospects and the U.S. economy, as evidenced by the actions they are continuing to take to offset the costs related to the ACA,” said Financial Executives International President and CEO Marie Hollein. “Healthcare, along with the outcome of the debt ceiling, will undoubtedly continue to impact CFOs in the next few months, and will be pivotal to business expectations for 2014.”

The electronic survey included 114 corporate CFOs from the U.S. and 51 corporate CFOs from Italy and France and was conducted from Oct. 9 to Nov. 6, 2013.

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