CFOs souring on U.S. economy

Sixty percent of CFOs believe the state of the U.S. economy will remain the same or worsen during the next six months, according to the Grant Thornton 2013 Fall CFO Survey. The survey reflects the insights of more than 1,600 CFOs and other senior financial executives across the United States.

The results come on the heels of what had been a slow increase in confidence in the U.S. economy during the past year, with 45% of respondents believing the state of the economy would improve in the firm’s spring survey, compared to just 31% in the fall of 2012 and 25% in the summer of 2012.

“The declining confidence and uncertainty in the performance of our economy shouldn’t be surprising given the recent gridlock surrounding our nation’s budget and debt ceiling negotiations,” said Stephen Chipman, chief executive officer of Grant Thornton. “It’s time for our country’s political leaders to embrace a long-term budget solution combined with comprehensive tax and entitlement reforms in order to remove the largest obstacles to business uncertainty and position the United States for a sustained economic recovery.”

Notably, 24% of CFOs cited funding the government and/or replacing across-the-board spending cuts known as “sequestration” as their most important legislative priority, while 24% point to the need for reforming the tax code.

Unfortunately, uncertainty extends throughout the survey findings, with 56% of those surveyed predicting that industry financial prospects will remain the same or worsen, revealing no change since the spring. The number of CFOs who believe the pricing or fees charged by their industry will remain the same or decrease also remained the same from the spring at 63%.

However, when CFOs were asked about employment opportunities in the next six months, 43% said their company’s headcount would increase or significantly increase, a moderate three-percentage point increase from the spring. In addition, more than two-thirds of CFOs (68%) expect the average cost of an employee’s salary to increase during the next 12 months, up from 65% in the spring.

About Grant Thornton LLP’s CFO Survey:

Grant Thornton conducts its CFO Survey twice a year with CFOs and other senior financial executives across the United States. The fall 2013 survey took place between Sept. 19 and Oct. 11, with 1,684 CFOs and controllers participating. The survey has a confidence interval of +/- 2.4% at a 95% confidence level. Questions ranged from the state of the economy to developments in accounting and financial reporting. Visit Grant Thornton’s CFO Survey for a copy of the survey findings.