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AFP CCI™ for 1Q2013: Treasurers Growing More Confident

  • By Staff Writers
  • Published: 2013-04-29

U.S. businesses are growing increasingly confident about their intermediate and longer-term prospects, according to the AFP Corporate Cash Indicators™ (AFP CCI™), underwritten by State Street Global Advisors. The forward indicator measuring expectations for the second quarter of 2013 was at -5, following a -4 reading during the previous quarter and only the third negative reading in the history of the survey.

"For the first time, the expectations index has shown negative for two consecutive quarters," said Jim Kaitz, AFP's president and CEO. "The change we saw at the end of last year may be the beginning of a trend of companies deploying their cash."

The AFP Corporate Cash Indicators™ measure recent and anticipated changes in corporate cash balances by calculating increase percentage minus decrease percentage. The AFP CCI™ are produced by the Association for Financial Professionals and are underwritten by State Street Global Advisors.

Two other AFP CCI™ measures released on Monday showed the pace of cash accumulation was slowing the opening three months of 2013. The 2013 Q1 quarter-to-quarter measure was +10 versus a reading of +13 a year earlier. The 2013 Q1 year-to-year measure was +8, which was not only down from +13 a year earlier but also the lowest year-to-year comparable in the history of the AFP CCI™.

April 2013 AFP Corporate Cash Indicators™
+10  1Q13 v. 4Q12
+08 1Q13 v. 1Q12
-05  2Q13 expectations
Represents the percentage of respondents indicating a increase in cash holdings versus those indicating a decrease in cash holdings.

AFP's research team sees the results as being consistent with financial professionals and other executives growing more confident about their organizations' prospects. "Companies that are confident about their ability to generate cash in the future through increased demand for their products and services tend to be more willing to deploy the cash that they have on hand today," said Kevin Roth, AFP's Managing Director of Research.

"In fact, survey participants told us that they would be using corporate cash balances to pay down debt, make capital expenditures and, in some cases, acquisitions," Roth added.

The AFP CCI™, launched in January 2011, provide treasury and finance professionals, policymakers and market analysts with timely data on a determinant of economic activity: corporate cash. The next set will be published July 29, 2013.

AFP Corporate Cash Indicators™ is a trademark of the Association for Financial Professionals. All AFP Corporate Cash Indicators™ survey questions and reports are the copyrights of the Association for Financial Professionals, and all rights are reserved.


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