Finance professionals remain cautious in their economic outlook,
believing the U.S. economy will grow at a 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 worry that growth is in
jeopardy if U.S. budget issues cannot be resolved quickly.
Respondents indicated 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' hiring and capital investments decisions. Any
agreement that defers decisions on fiscal issues is unacceptable 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 corporate
decision-making."
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.
ABOUT THE SURVEY
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 billion.
Read the full
report.