MIAMI – October 16, 2012 – Three quarters of
executives that manage corporate cash fear the consequences of the so-called
fiscal cliff, according to the Association for Financial Professionals (AFP),
which surveyed the 6,000 attendees at its Annual Conference in Miami. The
corporate treasury respondents believe the economy will worsen without action
to address the tax cuts and automatic spending cuts that are due to kick in at
the end of the year.
Responding to an on-site survey at the 2012
AFP Annual Conference, 39 percent of finance executives said that sluggish
economic conditions and weak demand also are uncertainties discouraging their
companies from making strategic investments in expansion and hiring.
Regardless of which candidate wins the U.S.
presidential election this November, 63 percent of survey respondents expect
the election to have no significant impact on business conditions and 71
percent anticipate no significant change in their investment spending after the
“Companies are looking beyond the elections,”
said Jim Kaitz, president and CEO of AFP. “The most important issue is resolving
long-term fiscal and deficit issues.” Negotiating the fiscal cliff and putting
America’s finances on a sound footing are the key aims of corporate treasurers.
Asked what they saw as the most important areas
for Washington, D.C. to focus on after the election in order to support
business activity and economic growth, the surveyed finance and treasury professionals
- Resolving long-term
fiscal/deficit issues (63 percent)
- Implementing changes
to avoid the fiscal cliff (49 percent)
- Reducing regulatory
complexity and uncertainty (42 percent)
- Resolving political
gridlock and improving the tone of political debate (37 percent)
- Corporate tax reform (33
- Policies aimed toward
the safety and soundness of the banking system (20 percent)
- Addressing unfair and
anti-competitive practices of foreign companies (10 percent).
Asked if they expected lower corporate bank
balances when the unlimited FDIC insurance on non-interest bearing transaction
accounts expires at the end of the year, 48 percent saw no significant change
while 49 percent expected to lower their balances.
“This survey reiterates our view that treasury
professionals see regulatory change as a significant concern for their
business,” said Bob Stark, VP of strategy at Kyriba, underwriter of the survey.
“It is also very interesting to note, although not entirely surprising, that
half of the respondents expect to reduce their cash held in bank accounts at
the start of next year. This change will increase the need for improved cash
visibility, a trend we have seen throughout the market.”
ABOUT THE SURVEYAbout AFP®
On Monday, October 15, AFP surveyed attendees of the 2012 AFP Annual Conference
in Miami about business and economic conditions. The survey generated 949
responses from senior finance and treasury executives across a broad range of
companies, typically with annual revenues over $500 million. See findings on http://www.afponline.org/onsite2012
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.