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Baruch College Partners with FEI for Latest CFO Survey

CFOs Renew Optimisim in U.S. Economy in 2015
New Survey Finds Overall Confidence in Business Prospects Among CFOs despite Challenges, Economic Concerns
CFOs Increase Cyber-security Budgets as 21% Experience Cyber-attack in Past Six Months


NEW YORK, NY-February 26, 2015 - Chief Financial Officers entered 2015 with improved optimism towards the U.S. economy and their businesses, despite mounting concerns toward the global economy, revealed results of the most recent quarterly survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business. While their employment and wage outlook remains positive, CFOs are fairly concerned about economic issues such as healthcare costs and government regulation, and see challenges to their business stemming from competition and the looming threat of a cyber-attack.

The "CFO Outlook Survey," which polls CFOs of public and private businesses in the U.S. on their economic and business confidence and expectations, found that CFOs are seemingly more confident now than they were when the previous survey was conducted. The survey’s quarterly optimism index for the U.S. economy jumped more than five points to 70.71 (from 65.26), which represents a 13 percent increase from where it stood a year ago (62.0). The optimism index for U.S. CFOs’ businesses increased to 73.11 (from 70.41 in September). Adding to their overall business confidence, respondents on average are anticipating a sizeable growth in net earnings (13%) over the next 12 months. Another encouraging sign among U.S. CFOs is their ability to maintain their current workforces, as 80 percent said they were not forced to reduce headcount over the past 12 months. Furthermore, 65percent of respondents said that the wage levels they are paying are on the rise compared with CFOs polled the same time last year.

“Increasingly optimistic U.S. CFOs appear poised to increase wage rates,” said Linda Allen, Professor of Economics and Finance for the Zicklin School of Business at Baruch College. “U.S. businesses are relatively flush with cash and are positioning themselves to meet global challenges (such as oil price declines, China’s slowdown and cyber-security threats), as well as uncertainties in the U.S. regarding interest rate increases anticipated during 2015.”

Despite their increased confidence, CFOs revealed that they still have a number of challenges and concerns for the year ahead. The survey revealed that competition is the most shared business challenge among CFOs in the first half of 2015 (65% selected this as a challenge). On average, companies experienced a nearly seven percent increase in related costs as a result of the Affordable Care Act (ACA). Half of respondents (50%) said they would like to see reform to the ACA in the form of full-time designation moved to 40 hours a week instead of 30. As such, when asked about their broader economic worries for their companies in 2015, respondents most commonly identified healthcare costs (64%) as a top concern, closely followed by government regulation/action (61%). Respondents ranked their confidence in the ability of Congress to reform U.S. tax law at a low 1.7 (on a scale of 1 to 5) and ten percent of respondents have even considered changing their firm's country or state of incorporation to reduce their tax obligation.

The number of major companies and organizations facing cyber-attacks in the past few years continues to escalate, and almost one quarter of respondents (21%) reported experiencing a cyber-attack on their IT systems within the last six months. Alarmed by this mounting threat, nearly three quarters (73%) of CFOs said they are considering increasing their budgets toward improving cyber-security. Respondents expressed mixed feelings about the role of government in combating threats to cyber-security: 46 percent believe they are a necessary component, while 54 percent believe that they are not. The percentage of CFOs who are revising their organization's cyber-security policy has increased by 39 percent since quarter. Additionally, there has been a 17 percent increase in the percentage of CFOs who are either upgrading security software and encryption protections, or implementing a cyber-security/IT plan - including prevention, resolution and restitution.

“The quarter’s survey shows that CFOs still have a number of concerns and business challenges, ranging from taxes to cyber-security, and that they share an uncertainty towards the government’s ability to deal unilaterally with these issues,” said Robert Kramer, Vice President, Government Affairs at Financial Executives International. “It is encouraging to see that CFOs are becoming more proactive in meeting these challenges, as demonstrated by the expansion in their responses to cyber-attacks.

When asked about the global situations that will have a long-term impact on the economy, the decline of world oil price was cited as being highly impactful (selected by 76% of respondents), second only to China’s economic slowdown (selected by 77% of respondents). Seventy-four percent agreed that world oil price decline will also impact the long-term economic conditions in the U.S (74%), and their companies specifically (50%). When asked about the effects of oil and gas fracturing technology, 50 percent said it would result in U.S. energy independence, and 45 percent said it would slow the dissemination of alternative energy technologies and energy conservation. But few (11%) believed it would increase CO2 levels. Although crude oil prices recently reached a nearly six year low, 69 percent of respondents estimated that price of oil will rise again in the next six months to between $50 and $60 per barrel. Fifty-seven percent of respondents said the current OPEC policy to maintain current production levels will result in the retrenchment of fracking production levels.

Looking beyond U.S. borders, U.S. CFOs’ confidence in the global economy decreased slightly from last quarter to 53.19 (from 55.78). CFOs continue to maintain a heightened concern over the fate of the Eurozone, with more than three quarters (79%) rating their concern a "three or higher” on a scale of one to five. Furthermore, more than half (57%) of respondents do not believe a recovery of the European economy will begin until 2017 or beyond. Even though 65 percent anticipated that the European Central Bank (ECB) would implement a quantitative easing program this year.

Other findings from the CFO Quarterly Global Outlook Survey include the following:

  • Interest Rates: Fifty-three percent of U.S. CFOs expect the Federal Reserve will raise interest rates in the second half of 2015. The percentage of CFOs concerned about the U.S. inflation is low, with 82 percent of CFOs rating their concern at a level “three or lower” on a scale of one to five.
  • Inflation: On average, CFOs anticipate the inflation rate will increase to 2.82 one year from now. Respondents are minimally concerned about inflation with 91 percent of respondents rating their concern at a level “three or lower” on a scale of one to five. Seventy-nine percent of CFOs said their concern has not changed since last quarter.
  • Cash/Capital: Eighty percent of respondents do not feel that their firm is capital constrained in terms of access to credit either from banks or from capital markets. U.S. CFOs stated they are most commonly accessing capital from banks (49%). On average, respondents’ companies currently hold 17 percent of assets in cash, up from approximately 10-12% in years past. With regards to the capitalization or capital structure, on average, 61 percent of company balance sheets are comprised of equity and 30 percent of long term debt obligations. 28 percent of CFOs reported they are spending cautiously compared to 17 percent who are making ambitious investments in capital expenditures. More than half of those making capital expenditures are focusing on IT (59%).
  • Social Media: Fifty-eight percent of U.S. CFOs said that their company currently monitors social media for opinions about the firm. Nearly half (49%) said they are either “somewhat concerned” or “very concerned” about how opinions expressed on social media platforms about their firm will impact business. The survey found however that sentiment toward social media use is shifting, with 64 percent of respondents revealing that social media use and/or acceptance increased in 2014, compared with the prior year. Sixty five percent of CFOs said that their company currently has a social media policy in place.


Overview of the Survey:
This quarter, the CFO Quarterly Global Outlook Survey, conducted by Financial Executives International and Baruch College's Zicklin School of Business, interviewed 113 corporate CFOs from the U.S. electronically from January 20 to February 15, 2015. 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. The respondents are members of Financial Executives International.FEI has been conducting surveys gauging the country's economic outlook from the perspective of CFOs for more than 12 years.




About FEI:
Financial Executives International is the leading advocate for the views of corporate financial management. Its more than 10,000 members hold policy-making positions as chief financial officers, treasurers and controllers at companies from every major industry. FEI enhances member professional development through peer networking, career management services, conferences, research and publications. Members participate in the activities of 74 chapters in the U.S. and a chapter in Japan. FEI is headquartered in Morristown, NJ, with a Government Affairs office in Washington, D.C. Visit for more information.

About Baruch College:
Baruch College is a senior college in the City University of New York (CUNY) with a total enrollment of more than 18,000 students, who represent 164 countries and speak more than 129 languages. Ranked among the top 15% of U.S. colleges and the No. 4 public regional university, Baruch College is regularly recognized as among the most ethnically diverse colleges in the country. As a public institution with a tradition of academic excellence, Baruch College offers accessibility and opportunity for students from every corner of New York City and from around the world. For more about Baruch College, go to



Nicole Madison, FTI Consulting (212) 850-5647 or
Manny Romero, Baruch College, (646) 660-6141,

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