Bernanke Gets High Grades on 1st Anniversary
Blogging Yet to go Corporate
FLORHAM PARK, N.J., and NEW YORK, Dec. 19 /PRNewswire/ -- Contrary to
the Federal Reserve Board's indication that inflation looms as a bigger
threat to the economy than recession, American CFOs are more concerned
about recession in 2007.
According to the 2006 fourth quarter "CFO Outlook Survey," conducted by
Financial Executives International (FEI) and Baruch College's Zicklin
School of Business, 30% of the participating CFOs indicated they were quite
to very concerned about recession, compared to 16% who are quite to very
concerned about inflation. Including those CFOs who indicated "moderate"
concern, 59% worry about recession compared to 53% who worry about
inflation.
"CFOs are concerned about both inflation and recession but on balance
today see recession as the larger threat," said John Elliott, Dean of the
Zicklin School of Business at Baruch College. "The tension between these
views suggests the current Fed attitude of wait and see may be about
right."
In the survey, CFOs gave high marks to Federal Reserve Chairman Ben
Bernanke as he approached his first anniversary in office. Half ranked his
overall performance as very good to excellent. He got the best marks for
"controlling inflation," where 54% rank his performance as very good or
excellent. He scored lowest in the area of "creating economic growth."
Concerns Not Enough to Eclipse Optimism or Stop Spending
Overall CFOs maintain a largely positive view about the economy and
their companies' prospects. The CFO economic optimism index for the U.S.
economy increased modestly to 69.2 in the fourth quarter from 67.6 in the
third quarter. Company-specific optimism was virtually flat at 75.6.
Capital spending over the next 12 months is expected to increase by a
weighted average of 7.3%, down from the 8.0% increase forecast last
quarter. However, companies plan to spend more on technology over the next
year: CFOs forecast an 8.4% increase in technology spending, as compared
with 6.9% in the prior quarter. New hiring is expected to increase about 4%
over the next 12 months, virtually the same as forecast in prior quarters
this year.
Health care costs appear to be continuing their relentless rise, with
CFOs planning to pay 9.2% more for health care next year. There has never
been a quarter when CFOs expected health care costs to decrease.
Leave Executive Pay Alone -- and Other Thoughts for the New Congress
Asked to set priorities for the new Congress, CFOs ranked the war in
Iraq and terrorism/homeland security as numbers one and two, respectively.
Tax reform ranked a close third on their list. CFOs do not favor
Congressional intervention on the pay front. Minimum wage and executive
compensation had the lowest priority rankings.
Sixty-six percent of the public company CFOs participating in the
survey oppose proposed legislation that would require shareholder approval
of executive pay, but one-third of public-company respondents either
support the legislation or would under certain circumstances.
Eighty-three percent of the participating CFOs think it's very to
extremely important for SEC and PCAOB guidance to help make section 404 of
Sarbanes-Oxley more cost efficient and effective. "Our membership has long
been clear that the expensive burden of compliance with Section 404
threatened to undermine the act's good intentions," said Colleen
Cunningham, President and CEO of FEI. "The dialogue between business and
the SEC in this area has been constructive."
Corporate Blogs
Though blogs have carved a niche in pop culture, corporate America has
not yet fully embraced this new and pervasive form of communication. Even
though the number of current Internet blogs is estimated at 50-80 million,
only 4% of those surveyed said their companies had a blog that was
officially sanctioned and written by an executive or other employee. Just
15% said their companies monitored blogs for mentions of their brand.
About the Survey
Full survey results are available at http://www.cfosurveys.com or from
Andrew Healy at andrewhealy@towerspr.com.
This quarter, the CFO Outlook Survey, conducted by Financial Executives
International and Baruch College's Zicklin School of Business, interviewed
279 corporate CFOs electronically the week of December 4. CFOs from both
public and private companies and from a broad range of industries, revenues
and geographic areas, including some off-shore companies, are represented.
Survey respondents are members of Financial Executives International.
Revenue-weighted averages are provided for projected changes in capital
and technology spending. An employee-weighted average is provided for the
projected changes in health care costs and hiring.
FEI has been conducting surveys gauging the country's economic outlook
from the perspective of CFOs for the past nine years.
About FEI
Financial Executives International (FEI) is the leading advocate for
the views of corporate financial management. Its 15,000 members hold
policy-making positions as chief financial officers, treasurers, and
controllers. FEI enhances member professional development through peer
networking, career planning services, conferences, publications, and
special reports and research. Members participate in the activities of 86
chapters, 75 of which are in the United States and 11 in Canada. For more
information about FEI, visit http://www.fei.org.
About Baruch
Baruch College, founded in 1847, is a senior college of the City
University of New York. The Zicklin School of Business at Baruch College is
the largest and most diverse AACSB accredited collegiate school of business
in the nation. Baruch has a long tradition of producing accounting and
finance graduates who become leaders as CPAs and CFOs.
http://www.baruch.cuny.edu
SOURCE Financial Executives International
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Related links:
http://www.cfosurveys.com
http://www.fei.org http://www.baruch.cuny.edu
http://www.prnewswire.com/comp/310650.html /
CONTACT:
Andrew Healy of TowersGroup, +1-212-354-5020,
andrewhealy@towerspr.com; and Chris Allen of FEI,
+1-973-765-1058, callen@fei.org; and John Elliott of Baruch
College, +1-646-251-3032, John_Elliott@Baruch.CUNY.edu
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