BOSTON –– November 8, 2011 –– Even though the executives who manage corporate cash expect hiring to be modest in 2012, they oppose additional fiscal stimulus, according to the Association for Financial Professionals (AFP).
Responding to an on-site survey at the 2011 AFP Annual Conference, 44 percent of finance professionals expect payrolls to expand in the next 12 months, nearly matching the 47 percent of organizations that had added employees over the past year. Another 39 percent say their organizations plan to maintain current payroll levels, while 17 percent intend to reduce the number of workers they employ in the coming months.
Yet, despite the tepid outlook, four out of five executives do not support an additional round of fiscal stimulus coming from Washington. Instead, 42 percent indicate that the economy and the size of the federal debt make deficit reduction the key priority, while 37 percent say that additional fiscal stimulus is not necessary though the recovery is too fragile to consider deficit reduction moves in the near future.
Some companies say they are starting to spend, with 45 percent of respondents indicating they have increased capital investment despite the turbulent business conditions of the past spring and summer. Another 42 percent maintained investment levels. Looking ahead, 45 percent expect to maintain current levels of capital investment in the coming year.
"We see some companies that are hiring and some that are investing, consistent with an expanding economy," said Jim Kaitz, president and CEO of AFP. "Yet the current pace of hiring and capital investment spending suggests that we have a long way to go."
Finance professionals see ongoing challenges for the U.S., with 26 percent saying the country has become a less attractive destination for investment and hiring in the last year, a result of the debt ceiling debate, S&P downgrade, and the slow pace of economic recovery. Reflecting the impact of the recession, 38 percent say the U.S. is a less attractive place for investment than it was three years ago.
Four out of five survey respondents pointed to additional factors holding back business, including an aversion to risk given the current environment, weak consumer demand, uncertain current/future regulatory environment and rising health care costs.
ABOUT THE SURVEY
On Monday, Nov. 7, AFP surveyed attendees of the 2011 AFP Annual Conference in Boston about business and economic conditions. The survey generated 1,205 responses from senior finance and treasury executives across a broad range of companies, typically with annual revenues over $500 million. See the full report on www.afponline.org/research. Data tables from the survey results are available by request through firstname.lastname@example.org .
The Association for Financial Professionals (AFP) serves a network of more than 16,000 members with news, economic research, treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators. AFP is the daily resource for the finance profession. AFP's global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada; London-based gtnews, an on-line resource for the treasury and finance community; and bobsguide, a financial IT solutions network.