Treasurers and CFOs are bullish on the American economy in 2015, with the largest percentage predicting improvement since 2005, according to a survey of 856 executives released today by the Association for Financial Professionals.
The AFP Business Outlook Survey found that 44 percent of finance executives expect the U.S. economy to grow between 2.0 and 2.9 percent, while 31 percent are even more optimistic and expect it to grow between 3.0 and 3.9 percent.
Finance executives expect growth to occur in the second half of 2015, creating another 1.9 million nonfarm jobs. Among those surveyed, 49 percent say their companies anticipate hiring workers in 2015.
Key Expectations for 2015:
- The U.S. economy will grow by a median of 2.7 percent, slightly faster than 2014.
- Nonfarm employment will expand by 1.9 million jobs, with 49 percent of companies adding workers in the U.S.
- Among companies with workers outside the U.S., 43 percent expect to add non-U.S. jobs.
- Consumer prices will rise by 1.6 percent, staying below the Federal Reserve’s two percent inflation target rate.
- U.S. dollar will continue to appreciate against other major currencies.
“AFP members accurately predicted this year’s economic growth,” said Jim Kaitz, AFP’s president and CEO. “We have been tracking cash accumulation, which slowed this year as companies began to invest in the future. Now the big news is that almost half of companies plan to expand payrolls in 2015.”
Nevertheless, finance executives see potential threats to economic growth, namely rising healthcare costs (51 percent), political gridlock in Washington (41 percent) and increased business competition (35 percent). They also see potential for increased corporate borrowing costs, with a median expected increase of 27 basis points in 2015. Fully 40 percent of respondents expect their borrowing costs to rise by 100 basis points or more in the next two years.
Read all the survey results at www.AFPonline.org/outlook.