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CFO Survey

Survey Reveals CFOs Taking Action as Economic Optimism Sinks Beyond All-Time Low

  • Companies "Greening" Businesses By Cutting Back on Corporate Travel
  • CFOs Say McCain Best Candidate For Their Companies

FLORHAM PARK, N.J. and NEW YORK, August 8, 2008 — CFOs of American companies' optimism toward the U.S. economy continued to sink to an all-time low in the second quarter, according to a recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

The CFO Optimism Index for the U.S. economy was 48.92 for the quarter, plummeting even further past last quarter (54.29), which was an all-time low for the survey. The growth of the U.S. economy was identified to be the principal CFO worry for the second half of 2008 (48%). Rising oil costs (35%), consumer spending / demand (29%), and inflation (25%) were also top concerns.

CFOs' outlook toward their own companies, however, remained relatively stable this quarter, as the Optimism Index for CFOs' own companies declined only 1.06 points from last quarter’s all-time low to 67.06. CFOs cited top business challenges for the remainder of the year as expense control and competition (30% and 25% respectively), while controlling labor costs was low on the list (1%). While availability of capital continues to receive significant attention in the financial press, few CFOs identified this as a top concern (10%).

”We continue to see that CFOs are increasingly anxious about the business ramifications of the current U.S. economic downturn,” said John Elliott, Dean of the Zicklin School of Business at Baruch College. "However, while economic worries remain, the steadiness in CFOs' outlook toward their own companies may reveal that they are adapting to the turmoil and taking appropriate actions within their organizations."

In the next twelve months these CFOs continue to plan increases in technology spending by an average of four percent and other capital spending by an average of eight percent. They expect modest hiring increases of one percent but believe that they will be able to increase product prices by five percent.

CFOs React to Oil Prices

Nearly half of respondents feel that the price of crude oil will continue to skyrocket. At least half of CFOs surveyed believe that the price of oil per barrel will be at least $160 or higher in six months, a 34 percent increase from the current $119.17 (as of 8/5/08) .

The survey revealed that CFOs are responding to mounting oil prices, with the vast majority of respondents either actively engaged in, or in the process of, changing behavior to accommodate oil prices. When those who said they were actively engaged were asked about specific ways in which they were changing their behavior, approximately half revealed that they were increasing prices for the products and/or services their company sells (53%), cutting back on corporate travel (50%) or taking steps to become more ecologically responsible or "green" (i.e. investing in more energy efficient products) (47%).

"This survey identifies oil prices as an issue for CFOs and they don’t anticipate cost relief," said Cheryl de Mesa Graziano, Vice President, Research and Operations for Financial Executives Research Foundation, the research affiliate of FEI. "CFOs right now are choosing to respond by increasing their products’ prices and cutting back on corporate travel, as well as actively taking the required steps to become "greener" companies through a number of ecologically responsible initiatives."

CFOs and the Presidential Election

Selection of the next President of the United States is currently a focus countrywide, and as CFOs gear up to hit the polls, they are evaluating which candidate’s policies best align with their companies. When asked which candidate, if elected to office, would be most beneficial to their company overall, an overwhelming majority of CFOs selected Republican presidential candidate John McCain (71%), while only 13 percent of respondents chose Democratic presidential candidate Barack Obama.

Respondents were also asked to gauge the impact that each candidate’s policies would have on their companies with regards to issues such as healthcare coverage, taxes, foreign trade/commerce, production & manufacturing costs and energy costs. On average, less than 10 percent of respondents felt that McCain’s policies would have a negative impact on any of these factors, while a majority of respondents felt that Obama’s policies would have negative impacts with regard to taxes (87%) and production and manufacturing costs (60%). Collectively, CFOs appear to be unimpressed by both candidates' healthcare policies, revealing that most do not believe that either candidate will help control healthcare costs. While nearly three quarters of respondents (70%) stated that Obama's polices would have a negative impact on their companies, an even larger number of CFOs (74%) felt that McCain would have no impact at all, and only 15 percent felt that McCain would have a positive impact.

Additional Data: CFOs Aren't Ready to Take Advantage of IFRS

The survey also revealed that CFOs are not yet prepared to welcome International Financial Reporting Standards (IFRS). Less that one fifth of CFOs surveyed said that they would take advantage of filing and/or preparing financial statements if the opportunity was available for their company (20%), while more than half (53%) would not. However, nearly half of the surveyed CFOs stated that it would take only two to three years for their company to adapt to IFRS should they decide to do so.

Public Cos Comply With XBRL Requirement through Filling Service
When CFOs of public companies were asked about how they plan to comply with the SEC’s recent proposed rule requiring the inclusion of an eXtensible Business Reporting Language (XBRL) exhibit with quarterly and annual reports, nearly half (46%) who are affected by the requirement said they would use an XBRL filing service to comply, and another 31 percent of CFOs plan to implement XBRL tagging software.

About the Survey

Full survey results are available at or from Nicole Madison at

This quarter, the CFO Outlook Survey, conducted by Financial Executives International and Baruch College's Zicklin School of Business, interviewed 219 corporate CFOs electronically the week of July 7. CFOs from both public and private companies and from a broad range of industries, revenues and geographic areas, including some off-shore companies, are represented. Survey respondents are members of Financial Executives International.

Financial Executives International has been conducting surveys gauging the country's economic outlook from the perspective of CFOs for the past ten years.

About FEI

Financial Executives International (FEI) is the leading advocate for the views of corporate financial management. Its 15,000 members hold policy-making positions as chief financial officers, treasurers, and controllers. FEI enhances member professional development through peer networking, career planning services, conferences, publications, and special reports and research. Members participate in the activities of 84 chapters, 73 of which are in the United States and 11 in Canada. For more information about FEI, visit

About Baruch

Baruch College is a senior college of the City University of New York. The Zicklin School of Business at Baruch College is the largest and most diverse AACSB accredited collegiate school of business in the nation. Baruch has a long tradition of producing accounting and finance graduates who become leaders as CPAs and CFOs. Visit to find out more.

MEDIA CONTACT: Nicole Madison of FD +1-212-850-5647