AFP Survey Shows US Corporate Treasurers, CFOs, Upbeat on Business Environment

American corporate treasurers and chief financial officers (CFOs) believe business conditions will improve in 2014 and that the US economy will grow by 2.1% and will create a further 1.95m nonfarm jobs, according to a survey of 824 executives released by the Association for Financial Professionals (AFP).

The
AFP Business Outlook Survey
, which has tracked business predictions of CFOs, corporate treasurers and other financial executives for the last 10 years, found that 52% of finance executives anticipate improved business conditions in 2014, with growth concentrated in the second half of the year. This is the largest percentage predicting improvement since before the recession of 2008-09. Among optimistic respondents, 11% see US gross domestic product (GDP) growth over three percent in 2014.

The survey found consensus around a bumpy start to the year, with only 29% of finance executives expecting improvement in the first two quarters.

Even if the economy grows modestly, more than three in five corporate practitioners expect revenue growth at their companies, with 57% expecting somewhat more revenue in 2014 and 5% expecting significantly more.

“With corporate revenue growth, the jobs will follow,” said Jim Kaitz, AFP’s president and chief executive officer (CEO). “Companies have pent-up demand for positions that had been put on hold in the last few years.”

The survey showed that finance executives now expect their companies to begin hiring, both in the US and in their operations outside the country with 43% anticipating expanding US payrolls. Among those with employees outside the US, 41% plan on further expanding non-US payrolls.

Yet, they see only modest inflation, predicting a consumer price index (CPI) growth rate of only +1.3%. Half the responding companies said they had taken some type of action to take advantage of historically low interest rates, such as refinancing long-term debt or issuing new debt. And while finance executives do not anticipate a significant change in their company’s near-term borrowing costs, 47% say that they plan to take advantage of low rates before any potential interest rate hike.

The AFP, which has been the parent of
gtnews
since 2007, surveyed its membership between 25 November and 6 December and generated 824 responses.

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