CFOs in the US are optimistic about the economy and financial prospects, according to a CFO Outlook Survey by Finance Executives International (FEI) and the Baruch College in New York.
According to the survey capital spending is expected to increase at two-thirds of companies over the next 12 months, with the increase averaging 4.3%.
Eighty-seven per cent of firms predict earnings will grow, with the increase averaging 13.2%. While still positive, these capital spending and earnings growth expectations are lower than reported last quarter.
Campbell Harvey, professor of finance at Duke University and founder of the survey, says: ?The CFOs are telling us that there are growing risks to a continued recovery. In addition to dampened capital spending growth, employment is expected to grow by only one per cent next year, a notable worsening of the employment expectations expressed by CFOs just last quarter. Our analysis of this quarter?s survey suggests the economic situation is growing more fragile.?
The survey asked executives from both public and private companies to select the top three risks, from a list of 10, that could affect their company in the coming year. ?The threats to the economic recovery are more acute than have been characterized by Wall Street pundits, with domestic terrorism and increasing interest rates at the top of the list,? noted Harvey.