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Baruch College Partners with FEI to
Launch CFO Survey:
Business Optimism Decreases Among U.S. Chief Financial Officers

-FEI/Baruch Survey Reveals Drop in U.S. CFO Optimism as
Year End Approaches
-Hiring, Eurozone, Healthcare and Debt Ceiling
Remain Concerns for CFOs

Morristown, NJ and New York, NY - November 19, 2013-While top financial decision makers in the U.S. remain moderately optimistic toward their outlook for the global economy, they are collectively less optimistic about opportunities for their businesses and the U.S. economy, according to the most recent survey of Chief Financial Officers conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business. This quarter, CFOs globally continue to be faced with a myriad of concerns, including headcount reduction and the stability of the Eurozone. U.S. CFOs also share the added concerns surrounding the Affordable Care Act (ACA) and a resolution to the debt ceiling.

The “CFO Quarterly Global Outlook Survey,” which polls CFOs of public and private businesses on their economic and business confidence, revealed a drop in the U.S. CFO Optimism index toward financial prospects for their businesses, from 70.7 in the second quarter to 65.10, 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 (56.2 from 61.2 in Q2), but remained steady for the global economy, increasing less than a point. In contrast, the CFO Optimism index for European CFOs increased with respect to the global economy (51.4 from 48.8 in Q1) and their businesses (60.6 from 59 in Q1). Their confidence in the U.S. economy declined slightly from the last time they were polled (61.6 from 62.4 in Q1). Looking toward the future, U.S. respondents expect the largest increases in net earnings and health care costs, while EU respondents anticipate modest increases in revenue and capital spending in the next 12 months.

Staffing and employment continue to be among the primary factors contributing to the concerns of CFOs. While 65 percent of U.S. CFOs and 35 percent of EU CFOs are planning to hire additional staff in the next six months, mainly professionals at the entry- and mid-career levels, more than a quarter of U.S. respondents (28%) and EU respondents (31%) said they were forced to reduce headcount at their companies over the last year. The most common factors cited by CFOs for reducing headcount were a decline in sales (44% of responses in the U.S.) and revised outlook/ long term goals (26% of responses in the U.S.). Looking forward, CFOs do not have high expectations for their country’s unemployment rate, with the majority of U.S. respondents expecting it will decline slightly to 7.2 percent one year from now, and EU CFOs expecting an increase to 11 percent on average. However, despite these challenges, the majority of CFOs in both regions are not restructuring their workforce toward just-in-time scheduling/employment practices or relying on a larger percentage of part-time employees.

“Our survey explores, from the perspective of the CFO, the internal changes that have taken place at businesses within the last year as well as the changes currently underway, and those anticipated in the year ahead,” said Linda Allen, Professor of Economics and Finance, Zicklin School of Business at Baruch College. “The results demonstrate a mixed bag for companies globally this quarter as they continue to be influenced by a number of macroeconomic factors. Decreased optimism toward their businesses in particular may have impacted their decisions to cut staff and maintain expectations for a high unemployment rate. U.S. CFOs responded that they have sufficient financial resources (cash and available credit) to expand via acquisitions and/or hiring, but continued uncertainty appears to be holding them back.”

Concerns over the fate of the Eurozone remain high this quarter as 70 percent of U.S. CFOs selected a "three or higher” when asked to rate their concern on a scale of one (not concerned) to five (very concerned), and 63 percent of EU CFOs expressed similar concerns. Adding to these worries, respondents seem divided on whether or not the re-election of German Chancellor Angela Merkel helps or hurts the EU’s chances for a stronger recovery. While nearly 60 percent of U.S. CFOs believe it will be helpful, only 41 percent of EU CFOs concur.

Although half of U.S. CFOs now believe the U.S. is already in the midst of a recovery, 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. The majority (59%) 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 (e.g., layoffs, furloughs) as a result of the ACA. The large majority of U.S. respondents (88%) 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 Marie Hollein, President and CEO, Financial Executives International. “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.”

In gauging the impact of the debt ceiling and the recent government shutdown, the majority of U.S. CFOs (83%) believe their businesses will be affected more if Congress fails to increase the debt ceiling. Two thirds of those respondents (66%) also believe this will have a larger impact on the U.S. economy as a whole. CFOs were also in agreement on future actions: 61 percent believe that the U.S. Congress should fund the government for FY 2014 and/or raise the debt ceiling, and only then separately deal with the long-term federal debt and deficit issue, while 37 percent completely disagreed with this statement.

Nearly all of U.S. CFOs (94%) believe that it will take the Federal Reserve until at least the first quarter of 2014 to begin to taper its asset purchases. Based on this expectation, close to three quarters (72%) have no particular business plans based on the Fed’s anticipated actions.

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

  • Cash/Capital: U.S. CFOs stated they are most commonly accessing capital from banks (61%), and EU CFOs are most commonly accessing capital from equity (61%). The majority of both U.S. and EU respondents stated that they are not using or considering any alternative sources of funding in the next 12 months.
  • Future Investments: U.S. respondents are currently directing investments towards risk management (47%) and dashboard and performance metrics (46%), cyber security (39%) and social media (38%). EU CFOs are also most commonly directing investments towards risk management (39%), followed by credit collection (33%) and R&D (31%). Interestingly, almost four times as many U.S. respondents (24%) are currently investing in philanthropic activities/charitable giving compared to EU respondents (6%). Conversely, nearly twice as many EU respondents (24%) are investing in making their businesses environmentally sustainable than U.S. respondents (12%).
  • Inflation: Eighty-two percent of U.S. and EU respondents expressed a low to moderate concern about inflation over the next 12 months, rating their concern at levels “one through three” on a scale of one to five, with one being “not concerned” and five being “very concerned.” On average, U.S. CFOs expect the rate of inflation in the U.S. will be 2.23 percent six months from now and 2.83 percent one year from now, while EU CFOs anticipate the inflation rate in their county to be on average 1.94 six months from now and 2.32 percent one year from now. Nearly half of all U.S. respondents (45%) and 50 percent of EU respondents anticipate the volatility of energy prices will increase their expectations for inflation.
  • Interest Rates: U.S. CFOs expect interest rates to remain below one percent over the next six months, and increase to 1.53 percent one year from now. This quarter, EU respondents are slightly more worried about interest rates than U.S. respondents, with 37 percent of EU CFOs rating their concern at levels “four through five” on a scale of one to five, compared with 28 percent of U.S.CFOs rating their concern at these levels.
  • Federal Reserve Chairman: Less than a quarter (22%) of U.S. respondents believe that the President’s choice of Janet Yellen for the next Fed Chairman will be welcomed by businesses, while the majority (73%) believe that Yellen will continue the existing quantitative easing policy of the Fed. When asked to provide their views on the performance of Federal Reserve Chairman Ben Bernanke with regard to his recent actions in responding to the current U.S. financial situation, more than half of all U.S. respondents (57%) gave him an above average letter grade of “A” or “B.”

Full survey results and historical data comparisons are available at or from Nicole Madison at The study is also available online at the Financial Executives Research Foundation bookstore and on the Baruch College home page at


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 114 corporate CFOs from the U.S. and 51 corporate CFOs from Italy and France electronically from October 9 - November 6, 2013. 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 in the U.S. are members of Financial Executives International. France survey respondents are members of Association Nationale Des Directeurs Financiers Et Du Controle De Gestion (DFCG); Italy survey respondents are members of Associazione Nazionale Direttori Amministrativi E Finanziari (ANDAF). Financial Executives International 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 15,000 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, teleconferences and publications. Members participate in the activities of 86 chapters, 74 in the U.S., 11 in Canada and one in Japan. FEI is headquartered in Morristown, NJ, with additional offices in Washington, D.C. and Toronto. Visit for more information.


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. For more information, visit



Nicole Madison of FTI Consulting: +1-212-850-5647 or



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