Economic confidence among corporate CFOs rebounded last quarter to a point where they're gearing up to spend more on staffing and capital investment, a new survey indicates.
The third-quarter "CFO Outlook Survey" conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business shows many of the 262 executives surveyed during early September held a heightened sense of confidence toward the U.S. economy and their own companies.
"Over the next 12 months, CFOs expect increases in technology spending, as well as the first uptick in hiring and capital spending reported in four quarters," FEI says.
A majority of respondents (58 percent) cited headcount reductions as one of the most effective actions in response to the downturn. Interestingly, 22 percent mentioned "retention of talent," making that the second-most popular response.
The CFO optimism index for the U.S. economy came in a 54.2, its highest since March 2008, and up from 41.9 in the second quarter. A gauge of how CFOs see their own companies' prospects jumped to 64.10 from an all-time low 51.44 three months ago.
Still, many are still hesitant to declare that the recession is at or near an end. Forty percent of those surveyed expect recovery to begin in the second half of 2010, and another 22 percent don't expect a recovery until 2011 or even later. Only 10 percent believe the U.S. economy is already in recovery.
CFOs also expressed concern over rising health care costs and the national debate over health care reform. Most expect to pass higher costs along to their employees.