Survey: U.S. CFOs’ Confidence in Business Reaches Post-Recession High


Despite concerns about global issues such as the decline in oil prices and cyber-security, Chief Financial Officers are approaching the second half of 2015 with increased optimism in the global economy and their businesses. According to the results of the latest “CFO Quarterly Outlook Survey” conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business, the outlook among CFOs towards the financial prospects for their own companies are the brightest it has been in years. Survey responses indicate that CFOs also are gearing up to increase hiring activity in the coming months, although a majority of CFOs have been consistently projecting hiring increases since the end of  2009.

The “CFO Quarterly Outlook Survey,” which polls U.S. CFOs of public and private businesses on their economic and business confidence and expectations, found that CFOs remain confident in the outlook for their own companies, with the optimism index for their companies reaching 74.01 this survey, the highest reported since 2006. The survey also revealed an increase in CFOs’ optimism towards the global economy, which climbed to 57.69 (levels not seen since the second quarter 2011, and up from 53.19 in February 2015) on the survey’s index. Respondents revealed a small decline in their optimism towards the U.S. economy to 68.14 (from 70.71 in February), but this score still remains almost four points higher than where it stood this time last year (64.17). Additionally, several other positive predictions made by CFOs support the overall conclusion that the U.S. business environment is improving, including anticipated increases in net earnings (10.47%) and revenue (9.15%) over the next 12  months.

Other major indicators of increased optimism towards U.S. CFOs’ businesses in the survey were specific to employment and wage levels. More than three-quarters of respondents (77%) said they have not been forced to reduce headcount at their company over the last 12 months. Furthermore, 74 percent of respondents said that the wage levels they are paying are on the rise compared to this time last year. Sixty-seven percent of respondents indicated they have plans to hire at their company in the next six months, representing the highest percentage of CFOs to respond positively to this question in three years’  time.

“Our most recent survey revealed a number of positive trends in terms of hiring at all levels,” said Linda Allen, Professor of Economics and Finance for the Zicklin School of Business at Baruch College. “CFOs with intent to hire over the next six months are seeking mid-career professionals (53.8%), entry-level university graduates or interns (48.3%), and experienced skilled technical workers (46.9%).  If such expectations materialize, there may be a reduction in the overhang of long-term unemployed and underemployed, as well as absorption of the new class of graduates joining the job  market.”

Cyber-security remains a concern, with 78 percent of CFOs considering increases in their budgets to prevent cyber-attacks. The number of major companies and organizations facing cyber-attacks in the past few years is on the rise, with one quarter of respondents (25%) reporting that they experienced a cyber-attack on their IT systems within the last six months. Seventy percent of CFOs said they are upgrading their security software and/or encryption protections. The number of CFOs establishing off-site backup systems/plans has increased to 64 percent (up from 47% in  February).

“The small decline in optimism towards the U.S. economy seen in this survey could be due in part to CFOs’ mounting concerns towards several global issues impacting long-term economic conditions in our country. CFOs are also seeing cyber-security as a serious global issue, with nearly half of respondents expressing concern about its long-term impact on the U.S. and the global economy,” said Robert Kramer, Vice President, Government Affairs at Financial Executives International. “It is reassuring to see that U.S. businesses are positioning themselves to face global challenges, like cyber-security threats through a number of specific  measures.”

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

  • Top Global Concerns: The top three global issues impacting long-term economic conditions in the U.S., as identified by respondents are: world oil price decline (69% of responding CFOs), China’s economic slowdown (65%) and the European economic slowdown (61%).
  • Eurozone: Another global issue of CFO concern is the fate of the Eurozone, with close to three-quarters of respondents (74%) rating their concern a “three or higher” on a scale of one to five. Furthermore, this survey saw an uptick in the number of CFOs (67%, up from 57% in February) who believe that a recovery of the European economy will not occur until 2017 or beyond. CFOs are divided in their predictions for when the European Central Bank (ECB) will end the quantitative easing program initiated this year, with 25 percent anticipating it will end in the first half of 2017, and 31 percent unsure of the timing.
  • Interest Rates: Fifty-four percent of U.S. CFOs expect the Federal Reserve to raise interest rates in either the first or second half of 2016. The percentage of CFOs concerned about U.S. interest rates remains 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 2.72 percent one year from now. Respondents are minimally concerned about inflation, with 89 percent of respondents rating their concern at a level “three or lower” on a scale of one to five. Three-quarters of CFOs (75%) said their concern has not changed since last quarter.
  • Cash/Capital: With regards to the capitalization or capital structure, on average, 59 percent of company balance sheets are comprised of equity and 28 percent of long term debt obligations. The large majority of respondents (81%) 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 (51%). As it relates to their companies’ cash positions, on average, respondents’ companies currently hold 13 percent of assets in cash. Close to half of CFOs (43%) reported they are spending cautiously, compared to 17 percent who said they are making ambitious investments in capital expenditures. Among those making capital expenditures, this survey saw a 17 percent increase in the number of CFOs focusing investments in IT, up to 69 percent (from 59% in February).
  • M&A: One third of CFOs (33%) indicated that their companies’ interest in making an acquisition has increased, with 71 percent targeting acquisitions in North America.  Only 21 percent said that interest in their company as an acquisition target has increased.  When asked about the implications of the recent increase in M&A activity, 28 percent of CFOs said they believe it is indicative of a strengthening recovery, while 41 percent said it is indicative of a lack of other investment opportunities.
  • Tax Law: Respondents ranked their confidence in the ability of Congress to reform U.S. tax law at a low 1.5 (on a scale of 1 to 5) and 10 percent of respondents have considered changing their firm’s country or state of incorporation to reduce their tax obligation.
  • Revenue Recognition: More than one third of CFOs of public companies (35%) said their company is impacted by the Financial Accounting Standards Board’s (FASB) decision to defer the effective date of the new revenue recognition standard by one year, as it allows them more time to evaluate existing contracts, or evaluate software to help with the transition.

Overview of the  Survey:
The CFO Quarterly Outlook Survey, conducted by Financial Executives International and Baruch College’s Zicklin School of Business, interviewed 217 corporate CFOs from the U.S. electronically from May 7– June 3, 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 inMorristown, NJ, with a Government Affairs office in Washington, D.C. 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

SOURCE Financial Executives International  (FEI)

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