CFOs and Treasurers Maintain Recessionary View

San Francisco, Calif. – October 6, 2009 – Even as the U.S. economy has exhibited signs of stability in recent months, financial professionals have not seen solid evidence that business conditions have turned the corner. The vast majority of attendees to the annual conference of the Association for Financial Professionals (AFP) believe the U.S. economy remains in a recession, despite indications of economic growth in the third quarter. Their uncertain outlook for near-term business conditions parallels expectations that their organizations will not resume hiring or capital spending, which they had halted over the past year, according to an on-site survey conducted yesterday.

Just 11 percent of responding conference attendees —which include CFOs, treasurers and other treasury and finance executives representing companies of a median size of $1.5 billion in annual revenues—believe that the U.S. economy is out of the recession. The outlook for the near-term is not much more optimistic. Just 20 percent of survey respondents believe the recession will end before of the year while 69 percent expect the recession will continue well into 2010.

"AFP members have played a critical role in maintaining the financial stability of their organizations through the recession," said Jim Kaitz, president and CEO of AFP. "As we look ahead, AFP will continue to work with policymakers to ensure that financial regulatory reform is balanced and represents the needs of financial professionals. We are confident that responsible regulation will foster stable and secure financial markets.”

Asked whether their organizations would be apt to increase or decrease payrolls in next six months, nearly two-thirds of financial professionals say they expect to maintain payrolls at current levels. Of those responding, 22 percent expect company payrolls to shrink further while just 14 percent anticipate that their organization will resume hiring over the next six months. Similarly, the overwhelming majority of survey respondents expect to either maintain or further cut capital spending over the next six months. Just 21 percent of financial professionals anticipate their organization will increase capital spending in the coming months.

As employment and capital spending have stabilized, so has their companies’ access to capital. More than half of respondents indicate that their organizations’ access to capital stabilized over the past six months. Further, the area where capital access may have improved is among companies that have utilized the debt markets—31 percent of organizations have had improved access to debt markets over the past six months. Access to banking lending has improved for 22 percent of respondents while a similar percentage report improvements in raising capital in the equity markets.

When asked about the greatest risk to their organization’s ability to prosper in 2010, financial professionals were most likely to identify one of two threats: failure of consumer demand to materialize (30 percent) and the possibility of a double dip recession (28 percent). Consistent with the reported stability in capital markets above, only 12 percent of survey respondents see a loss of access to capital as the greatest risk to their organization.

AFP will further explore these and other forward-looking economic topics in its annual Business Outlook Survey, which the association will publish in December.

ABOUT THE SURVEY
On Monday, Oct. 5, AFP surveyed attendees of the 2009 AFP Annual Conference on their perceptions of the state of the U.S. economy and its impact to their organizations. The survey generated 982 responses from senior finance and treasury executives across a broad range of companies, typically with annual revenues over $500 million. Tables of the survey results are available by request. For more information, see: www.afponline.org/research

ABOUT AFP
The Association for Financial Professionals (AFP) serves a network of more than 16,000 treasury and finance professionals. Headquartered in Bethesda, Maryland, AFP provides members with news, economic research and data on the evolving world of treasury and finance, as well as world-class treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators. AFP is the daily resource for treasury and finance professionals.

AFP’s global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada, AFP’s gtnews, an on-line resource for the treasury and finance community, and the London-based bobsguide, a financial IT solutions network.