Optimism About the Economy Improves Among U.S. CFOs in Latest Bank of America Merrill Lynch CFO Outlook Survey
More Than Half of Financial Executives Expect Economy to Expand, Their Companies to Hire More Employees This Year
CHARLOTTE, N.C.--(BUSINESS WIRE)-- U.S. financial executives are much more optimistic about the national economy than they were last fall, with nearly two-thirds expecting it to grow in 2012, but they remain cautious about the global economy, according to the latest Bank of America Merrill Lynch CFO Outlook survey.
Of 251 executives surveyed recently, 63 percent said they expected the U.S. economy to expand this year, up significantly from 38 percent in the previous survey conducted in fall 2011. Only 4 percent expects the economy to decline, down from 11 percent. CFOs gave the current economy a score of 53 out of 100, up from 44 in the previous report. The global economy received a score of 47, up slightly from 43.
CFOs optimism extended to hiring, with 51 percent expecting their companies to add employees in 2012, up from 46 percent. Executives also increasingly forecast higher revenues and profits this year, according to the survey.
Although challenges remain, CFOs clearly feel better about the economy and opportunities for growth in 2012 than they did in late 2011, said Laura Whitley, head of Global Commercial Banking at Bank of America Merrill Lynch. With more executives expecting increases in revenues, profits and personnel, its not surprising that optimism about the U.S. economy as a whole is improving.
As for barriers to business growth, government involvement was the most popular response, chosen by 37 percent of CFOs, followed by weak customer demand, domestic competition and operating costs. When executives were asked how the U.S. government can encourage domestic business growth, the top response was simplify laws and regulations, chosen by 56 percent of CFOs, followed by change corporate tax policy, reduce the budget deficit, and offer tax credits or incentives.
Other notable findings in the survey:
- Regarding revenues, 64 percent of CFOs expect revenues to increase this year, up from 56 percent last fall. In addition, 50 percent of CFOs expect profits to grow, up from 41 percent.
- The biggest potential impact on the economy is oil prices, chosen by 65 percent of CFOs up from 40 percent last fall. In addition, 63 percent listed the effectiveness of U.S. government leaders as a top concern, 54 percent listed the U.S. budget deficit and 51 percent listed healthcare costs.
- The top financial concerns for executives own companies were energy costs and healthcare costs, both chosen by 51 percent of CFOs. Energy costs was up from 43 percent in the previous survey, while healthcare costs was down from 56 percent.
- Cash flow, consumer confidence, credit availability and U.S. unemployment levels all have declined significantly as concerns from the previous survey.
Conducted by Granite Research Consulting, the CFO Outlook helps Bank of America Merrill Lynch better understand how financial executives view the economy. The results were compiled from interviews of CFOs, finance directors and other executives selected randomly from U.S. companies with annual revenues between $25 million and $2 billion.
Interviews were conducted from mid-February to mid-March. The margin of error is +/-6 percent. The full report will be available in mid-May at www.bankofamerica.com/cfooutlook.
Bank of America (BAC)
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,250 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
For more Bank of America news, visit the Bank of America newsroom.
Reporters May Contact:
Jefferson George, Bank of America Merrill Lynch, 1.980.683.4798
Source: Bank of AmericaCopyright Business Wire 2012