Financial officers at US companies gave the economy its highest score in five years and were significantly more confident about economic growth in 2013 in the latest Bank of America Merrill Lynch CFO Outlook survey.
The 250 CFOs who participated in the survey gave the US economy an average score of 58 out of 100, up from 49 in the previous survey conducted in 2012. CFOs gave the global economy a score of 51, up from 45.
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Optimism about economic growth voiced even stronger, with 55% expecting expansion in 2013, compared with 39% in the previous survey. Perhaps more telling, 10% said they expect the economy to shrink, down from 24%.
The report says that 76% of CFOs continue to do more business in foreign markets, up from 73% in the previous survey and 67% a year ago.
When executives were asked about foreign markets, 84%of CFOs said their companies have operations in Canada or Mexico, 72% in Asia and the Pacific, 66% said Europe, the Middle East or Africa, and 25% said Latin America.
Regarding expansion plans, 37% of CFOs named Asia and the Pacific, and 27% said Canada or Mexico, 15% Europe, the Middle East or Africa, and 9% said Latin America. 94 % CFOs said that they expect sales to stay the same or increase, up from 91% in the previous survey.
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By GlobalDataAlastair Borthwick, head of global commercial banking at Bank of America Merrill Lynch, said: "Beyond their brighter view of the economy, CFOs and their companies remain focused on new markets and opportunities for international growth.
"More than ever, US companies are seeking help with accessing capital, managing risk, maximizing cash and increasing efficiency as they grow their businesses."
Among potential impacts on the U.S. economy, executives overwhelmingly named health care costs, with 72% ranking it as a top concern, up from 62% in the previous survey and 51% one year ago. The top financial concern for CFOs’ own companies was healthcare costs, chosen by 70%, up from 58% and 51%.
CFOs’ optimism extended to hiring with 48% of CFOs expecting their companies to hire employees this year, up from 45% in the previous survey.
Regarding revenues and profits, 56% of CFOs expect revenue growth, while 45% anticipate a growth in profit margin, up from 40%. CFOs gave the manufacturing sector a score of 57 out of 100, up from 53 in the previous survey.
Among the challenges faced by companies local, on-the-ground expertise listed 19% of CFOs, followed by risk management, economic stability and local/international laws, each at 18%.
