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CFO Survey

FEI/Baruch Survey: Revenue and Domestic Growth Top CFOs?
2012 Concerns and Challenges

Financial Executives International and Baruch College
  • U.S./Europe CFOs Have Varying Degrees of Economic and Business Confidence; Express Mounting Concern over Eurozone

  • Majority of CFOs Hiring Temporary Workers

  • Romney Is Preferred Presidential Candidate, But Likelihood of Win Uncertain

MORRISTOWN, N.J. and NEW YORK, N.Y., February 28, 2012 ? Chief Financial Officers entered 2012 with a slew of economic worries and business challenges, according to the most recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business. This quarter CFO anxieties extend beyond traditional business issues and reflect the upcoming U.S. Presidential elections and future of the Eurozone crisis in 2012.

The quarterly “CFO Outlook Survey,” which polls CFOs of public and private businesses in the U.S. and Europe (Italy and France) on their economic and business confidence and expectations, found that domestic economic growth topped the list of economic concerns across the board ? some 48 percent of CFOs in both the U.S. and Europe rated it their number one or number two economic worry, a similar sentiment to their view a year ago. ?Similar to 2010, revenue growth is the top business challenge that CFOs are facing across both regions for the first half of the year (34% of CFOs in the U.S.; 27% of CFOs in Europe), followed by expense control (15% in the U.S; 18% in Europe), demand (14% in the U.S; 16% in Europe) and competition (11% in the U.S.; 14% in Europe).

The concerns over local economic growth and revenue are impacting CFOs’ overall confidence. The Q4 2011 optimism index for European CFOs toward their own businesses decreased to 57.6 from 61 in the third quarter.? However, their confidence in the global economy jumped five points to 51.8 from its survey low in November 2011. This quarter, CFOs in the U.S. saw little change in overall optimism in these areas quarter over quarter - their confidence for the global economy rose slightly to 46.1 (from 45.50 in Q3), as did their confidence in their own businesses (67.60 from 67.30 in Q3).? U.S. CFOs did report increased optimism in the U.S. economy this quarter, moving six points to 57.1 (from 51.10 in Q3).

U.S. CFOs continued to forecast higher projections for their business than did their European counterparts with double digit increases in the areas of capital spending and net earnings (both 13%) over the next 12 months. In the U.S., technology spending is expected to rise 9.1 percent and revenue is expected to increase 8.2 percent.? European CFOs on average expect more modest increases in these areas.

“The confidence among U.S. and European CFOs this quarter is little changed from the prior quarter,” said John Elliott, Dean of the Zicklin School of Business at Baruch College. “U.S. CEOs have noticeably higher growth expectations around their businesses than do their European counterparts.? U.S. CFOs now see continuing improvement in unemployment rates which they expect to drop to 8.1 percent within a year.”

With the continuing uncertainty in Greece, CFOs share concerns about the fate of the Eurozone.  When asked to rate their concern on a scale of one (not concerned) to five (very concerned), nearly all of U.S. CFOs (93%) selected a "three or higher," which surpassed the percentage of CFOs in Europe who expressed this sentiment (77%). Thirty percent of European CFOs feel that the European Central Bank holds the primary ability to produce a lasting solution to the Euro-crisis, followed closely by Germany (26%).? In the U.S., more CFOs believe that the ability lies with Germany (33%) than the European Central Bank (17%).

Fewer European CFOs Planning to Hire; CFOs Widely Use Temporary Employees

This quarter, CFOs in Europe expect unemployment rates to progressively increase in the next 12 months. On average, European CFOs expect the unemployment rate to hover around 11 percent six months from now, and jump to nearly 12 percent within a year. U.S. CFOs expect the rate to decrease a year from now to 8.1 percent.? CFOs in both regions are revealing a wide use of temporary, interim or contract professionals within their organizations. Three-quarters (75%) of CFOs are currently using this type of employees. With unemployment expected to remain high, CFOs in Europe are uncertain if they plan on expanding their workforce.  Forty-two percent (42%) plan to hire addition employees within the next six months, but a similar number (43%) stated they will not be hiring.  In comparison, the majority of their counterparts in the U.S. are planning to hire in the next six months (57%), and about a third (32%) not planning to hire. ?

U.S. Presidential Elections: Romney is Preferred Candidate, But Who Will Win?

The upcoming U.S. Presidential election remains top of mind for all Americans, and CFOs are focused on the issues that potentially impact their business as the President is chosen.? The top issues for CFOs when choosing a candidate in the 2012 election are reductions of the national debt and unemployment, followed by taxes and regulation(s). Of the remaining candidates at the time the survey was taken, former Massachusetts Governor Mitt Romney was the preferred choice (48%); the incumbent President Obama and former Speaker of the House Newt Gingrich were a distant second and third (13% and 12% respectively). However, CFOs are mixed on who they believe will actually win in November.? At this point in the race, they are split between President Obama (45%) and Former Governor Romney (40%).

“With nine months remaining until the election, U.S. CFOs are most concerned about how the candidates will address the issues that play an essential role in the health of their companies,” said Marie Hollein, President and CEO of Financial Executives International.? “Whether or not their preferred candidate is voted into office, CFOs are going to demand reforms that will bring much needed economic growth in the U.S. It will be critical for the Administration to take into careful consideration the concerns of U.S. businesses, and work together to find solutions.”

Within the current Administration, CFOs are most eager to see tax reforms that will revive American businesses.? When asked what piece of legislation they would like to see signed into law this year, nearly a quarter (24%) would like to see the Bush individual tax rates renewed. This was followed by a cut of the corporate tax rate to 25 percent (17%), and elimination of the employer mandates and fees associated with the Patient Protection and Affordable Care Act (15%).

Other findings from the CFO Outlook Survey include a number of forecasts and attitudes on key economic indicators:?

  • Inflation: U.S. CFOs are seeing inflation as a minor concern.? When asked to rank their concern on a scale of one to five (with five being very concerned), most U.S. CFOs (88%) selected a “three or lower.” In Europe, concerns are greater with 43 percent selecting a four or five. The large majority of CFOs (78% in the U.S. and 72% in Europe) stated that their concern remained the same since the previous quarter. The expected rates of inflation in the two areas are expected to converge with U.S. CFOs expecting a rate of 2.9 percent one year out and European CFOs expecting 3.2 percent.

  • Interest Rates: CFOs forecast interest rates in the U.S. to remain around 2.4 percent six months from now, rising to 2.7 percent a year from now. Similar to inflation, the large majority of CFOs have a moderate to low concern over interest rates, and on a scale of one to five, 88 percent selected a “three or lower.” Meanwhile, European CFOs expect interest rates to be around 4 percent within the next six to 12 months, and when asked to rank their concern on a scale of one to five, they are more concerned about the interest rates, with nearly three quarters (74%) expressing a concern of “three or higher.”

  • Access to Credit:?? As they closed out the first month of 2012, access to credit appears to be easier for CFOs in the U.S than in Europe.? The majority of Europe CFOs believe that credit will be more difficult to access in the next six months (54%), compared with only 10 percent of U.S. CFOs. Nearly three quarters (73%) of U.S. and 42 percent of European CFOs see no change in their credit situation.

  • Capital Spending: While CFOs are making capital investments, most of those CFOs in Europe (58%) and the U.S. (43%) are spending cautiously at the current time.? However, a third (33%) of CFOs in the U.S. and a quarter (25%) of CFOs in Europe stated that they are spending at a normal rate and less than ten percent are holding on all investments. ?Most CFOs are directing capital expenditures toward technology (44% in the U.S. and 41% in Europe), followed by expansion into new and emerging markets and machinery.

  • Oil Prices: CFOs believe that crude oil prices, which were $99.58 when the survey was taken, will not change substantially in the next six months, with the overwhelming majority (84% of U.S. CFOs and 87% of European CFOs) believing that it will stay around $90-$110.

Additional Findings

Additional findings include cash position and balance sheets, and CFO’s plans for international expansion, with 72 percent of those surveyed in U.S CFOs and 56 percent of those in Europe stating that is not a part of their strategic objective.? 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 Outlook Survey, conducted by Financial Executives International and Baruch College’s Zicklin School of Business, interviewed 238 corporate CFOs from the United States and 123 corporate CFOs from Italy and France electronically from January 30th ? February 9th. 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 U.S. survey respondents are members of Financial Executives International; France survey respondents are members of Association Nationale Des Directeurs Financiers Et Du Controle De Gestion (DFCG) and 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 1 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

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


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