In the last six months U.S. chief financial officers (CFOs) of middle-market companies have grown more positive about the economy overall and the state of their industries and businesses, according to the latest middle-market CFO survey by GE Capital. In fact, 94% expect the U.S. economy will grow or remain stable in 2012, up 14 points from the previous survey, with 23% shifting to a growth outlook.
In the first quarter of 2012 GE collected survey responses from 495 CFOs of companies with average revenue of $143 million. The surveyed businesses operate across seven major industries: metals, mining and metals fabrication; food, beverage & agriculture; general manufacturing; healthcare; retail; technology & business services; and transportation.
* 87% of CFOs anticipate their industry to grow or be stable in 2012, the same as with 6 months ago, but with 9% shifting to a growth outlook.
* 91% expect company revenues to grow or be stable this year, but the percentage who see growth is up 5 points to 67%.
* 81% expect company profits to grow or be stable in 2012, up 8 points.
CFOs were more positive than in last year's third quarter about their own industry. Food, beverage & agriculture CFOs were the most positive, and healthcare companies had the least favorable views.
This confidence is reflected in their investment plans in 2012.
* A large majority of respondents - 83% - plan to maintain or increase their overall cost structure in 2012, up 1 point from the last survey.
* 74% of CFOs plan to hire in 2012, up 6 points. GE expects the average projected workforce to increase 5% in 2012.
* 76% expect to grow or maintain total capital expenditure spending in the next 12 months, down four points from the last survey.
While CFOs' sentiment on the current health of the U.S. economy grew, views on the strength of the global economy fell again, with concerns about Europe on the rise. Worry over the U.S. budget deficit was just as strong, and was higher in importance than unemployment concerns. GE said the two biggest threats cited to business performance over the next 12 months were healthcare and raw materials costs. More than half - 51% - of CFOs expect their company to raise product/service prices in 2012, down from 59% a year ago.
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