CFOs more bullish on economy

Hopefully, the world’s CFOs know what they’re talking about.

Three-quarters of the senior finance executives surveyed around the globe expect economic expansion over the next 12 months, according to a new American Express survey.

It was the highest percentage from the 665 execs polled since Spring 2008, said a news release detailing results of the American Express/CFO Research Global Business & Spending Monitor. One-third of those surveyed were from the U.S.

With many companies sitting on large cash surpluses, deal-making tops the list when it comes to their plans for deploying capital, the survey found. Sixty-nine percent are focused on aggressive M&A activity over the next year, the news release said.

Other key findings include:

– Over half (54 percent) see economic growth accelerating in the second or third quarter of 2011. Seventy-one percent predict growth by year-end.

– Around the world, execs who say their companies plan to “spend more” on labor/head count in the next year outnumber those who say they plan to “spend less” on labor by nearly two to one (32 percent versus 17 percent).

– Lessons learned in the downturn will lead to a more cautious approach. For example, 76 percent will conduct more rigorous due diligence of M&A opportunities.

– Finance executives will spend more on market access and nearly half (48 percent) plan to increase the sales workforce.

– Almost half (46 percent) plan to invest more in customer service over the next 12 months.

– Two in five (41 percent) will spend more on travel this year – up from just 26% a year ago.

- Henry Unger, The Biz Beat

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15 comments Add your comment

Chris

May 18th, 2011
7:24 am

I seriously doubt these CFO’s have any predictive ability.

Its’ more likely that in about one year they’re going to feel like Mike Tyson after Buster Douglas got through with him, as the economy tanks again. What just hit me?

Matt

May 18th, 2011
7:41 am

I agree with Chris. These people know as much about where the economy is heading as my 2 year old. I’ve learned over the years that it’s just a giant crapshoot.

Truth

May 18th, 2011
7:49 am

These CFOs know where the money is going on behalf of their companies. They montior risk and valuation models that are lightyears above what most people can even comprehend. I trust them, agree with them, and will continue to put as much money into investment as I possibly can. Naysayers will still be negative and cynical regardless of what happens. Life is too short to worry. Plan for the worst but expect the best.

The Economy

May 18th, 2011
7:50 am

It’s there job to be bullish, nothin but smoke n mirrors. We will hit bottom late 2012 or early 2013, bounces on bottom for 2 more yrs. Look for signs of recovery in late 2015. I have decided!

Homer

May 18th, 2011
8:00 am

Three-quarters of the senior finance executives surveyed around the globe expect economic expansion over the next 12 months. They will be buying a new BMW, a house in the Hamptons, shopping at Tiffany’s and vacationing in Europe. The rest of us will be subscribing to groupon.

nativeson71

May 18th, 2011
8:16 am

I have worked for home depot for 15 years….What does M&A mean???

Truth

May 18th, 2011
8:17 am

Mergers & Acquisitions

Tyler Durden

May 18th, 2011
8:20 am

Publicly traded companies stocks are flying high due to the injection of fed dollars. I would be bullish as well under those circumstances. The rest of us have to either relocate or change career paths to be bullish. You are not your khakis.

Tyler Durden

May 18th, 2011
8:25 am

I would also wager that many of these companies have international holdings. The rest of the world is thriving; so, I guess that is good. Or is it?

Homer

May 18th, 2011
8:33 am

Here is what M&A might look like for nativeson71. You come to work everyday at Home Depot and do a good job. Home Depot pays you just enough to keep you around. Home Depot saves a lot of money by not giving you raises and insisting that you purchase your own orange aprons. Home Depot saves so much money that they need to do something with it because they sure don’t want to give it away to their employees or their shareholders. That would be stupid. So they look around and find a niche company that has been competing with Home Depot. They make the company an offer that will enable their executives to retire at 30 with a fortune equal to Switzerland’s GDP. Home Depot has just made a M&A. After the M&A Home Depot finds itself with employees with overlapping job responsibilities. Home Depot lays off a few thousand people. If you are lucky enough to have survived the layoffs the thought of buying your own orange aprons is now pretty appealing.

The Dogfighter Returns

May 18th, 2011
9:27 am

Ask them when good paying jobs will return to America? :)

SuperSlacker

May 18th, 2011
9:30 am

Things are great! Staples missed earnings.Staples blamed lack of demand for office products. GM’s stock is trading beneath the IPO amount. Extend and pretend!

Grazer

May 18th, 2011
9:54 am

Truth – ‘They montior risk and valuation models that are lightyears above what most people can even comprehend’

I hope you’re joking. Google ’subrime mortgage crisis’ for evidence of how intelligent these people are vs how intelligent they think they are.

Futhermore, corporate finance should truly report to their company’s advertising departement to accurately represent their profession.

Road Scholar

May 18th, 2011
11:03 am

These CFO’s know more than most American taxpayers, esp the Tea Partiers!

Tyler:”Publicly traded companies stocks are flying high due to the injection of fed dollars.”

Oh really!?

Truth

May 18th, 2011
11:31 am

The only thing intelligence has to do with this conversation, is that the lack of it is obvious in these comments. Its easy and takes no factual support to reject any positive outlook and say, “yeah, they are idiots.” The fact is, yes, mistakes were made due to loose lending laws and the liberal, delusional dream of “let’s let everyone have a home, even those who can’t afford one.” We learned from that and now controls are in place to prevent a similar situation. Learn and move forward. Get over it.