remain cautious in their economic outlook, believing the U.S. economy will grow
at the modest pace of 1.7 percent in the coming year, creating an additional 1.3
million jobs, according to a survey released today 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 nine years, found
that nearly half of survey respondents (46 percent) anticipate improved
business conditions in 2013, with much of this growth occurring in the second
half of the year. However, they temper their prediction with a caveat: Growth
is in jeopardy if U.S. budget issues cannot be resolved quickly.
that Congress and the White House must act immediately to resolve long-term
budget deficits, with over 60 percent believing the solution must be a
combination of spending cuts and increased tax revenues.
The threat of a fiscal
cliff is already affecting some organizations’ decisions on hiring and capital
investments. Any agreement that defers decisions
on fiscal issues would not be acceptable to corporate financial executives. Almost
two-thirds of organizations say Washington’s inability to reach consensus on a
number of issues of economic importance makes them at least somewhat more
hesitant to make investments for growth.
“Many companies are
poised on the brink of growth,” said Jim Kaitz, AFP’s president and CEO, “but political
theater is having a crippling effect on corporate spending and hiring, even
In order to improve
business conditions and stimulate hiring and investment, respondents believe
Washington must agree on a long-term plan to reduce the federal budget deficit.
While a majority believes this should be done with a blended approach, 35
percent believe the deficit should be reduced primarily or exclusively with
spending cuts, while only 4 percent of respondents emphasized tax revenue
increases as the solution to reducing the deficit.
Other actions that could
trigger increased corporate growth include reforming corporate taxes and addressing
the regulatory burden on corporations, survey respondents said.
A plurality of
companies expects to expand payrolls next year, both within and outside the
U.S. Forty-two percent of organizations
will expand employment in the U.S. during 2013. Among companies that have
employees outside the U.S., 41 percent plan to expand further internationally.
Financial professionals are responsible for ensuring that their companies have
enough cash on hand to fund operations and evaluating when and how to invest their
companies’ assets, so they are uniquely qualified to observe business
conditions and make assumptions about how those conditions may change over the
short and immediate term.
From Nov. 26 through Dec.
7, the AFP surveyed U.S. financial professionals about current and expected
business conditions, the ninth year it has done so. The survey generated over
1,300 responses from corporate practitioners holding a variety of positions,
including CFO, vice president of finance, treasurer and assistant treasurer,
employed across a wide range of industries, including financial services. The
typical respondent is employed by an organization with annual revenues of $1.5
Read the report on www.afponline.org/outlook
The Association for
Financial Professionals (AFP), headquartered outside Washington, D.C., serves a
network of more than 16,000, members with news, economic research and data,
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.