Baruch in the News

Bureau of National Affairs (BNA) Highlights Latest Zicklin School of Business CFO Outlook Survey

  • Economic Outlook: Survey Shows U.S., European CFOs Cautious About Recovery, Unemployment, Inflation
    BNA Daily Report for Executives
    By Stephen Joyce
    9 May 2011

    NEW YORK—Chief financial officers of U.S. firms expressed caution and uncertainty in a survey issued May 5 about the future of the U.S. economy and their own companies, Baruch College Zicklin School of Business Dean John Elliott told BNA May 6.

    The CFO Outlook Survey, a quarterly report soliciting the views of hundreds of CFOs in the United States, France, and Italy, said its so-called optimism index for the first quarter of 2010 was 64.10, down slightly from the index's 2010 fourth quarter level of 65.50.

    “As we look around the marketplace we're seeing a lot of caution. We seem to be past a lot of anxiety about a double dip [a second downturn following the 2007-2009 recession]. What we are continuing to encounter is ambiguity and uncertainty about how robust the recovery is, what the unemployment consequences will be—all of those things,” Elliott said.

    Though U.S. financial officer optimism edged down slightly in the latest survey, it was still higher than the optimism expressed by survey respondents based in France and Italy regarding their own companies and the global economy, the survey said.

    Still a ‘Mixed Story.’

    Elliott said there is “no question” chief financial officers are now much more confident than two years ago, during the first quarter of 2009, as CFOs were continuing to combat the effects of the recession. In the May 5 survey, a plurality of the executives predicted double-digit gains in earnings and forecast double-digit capital expenditure spending during the next 12 months, for example.

    But, Elliott said, “this is not a roaring freight train of improving economic stories.” The CFOs showed particular concern about persistent unemployment, for instance. U.S. survey respondents predicted the U.S unemployment rate in the first quarter of 2012 would be 8.2 percent; currently, the unemployment rate in the United States is 9.0 percent.

    And fully 81 percent of the U.S. financial executives expressed a moderate-to-high concern about inflation, the survey said. “It's a mixed story, still,” Elliott said. Financial Executives International President and Chief Executive Officer Marie Hollein agreed, telling BNA May 6 companies are “proceeding with caution.”

    The CFO Outlook Survey, conducted quarterly by FEI and Baruch College's Zicklin School of Business, electronically interviewed 300 corporate CFOs based in the United States, 96 based in Italy and 67 based in France from April 5-17.