Financial Executives Predict Inflation Increase

Results of a new poll of 304 companies report that CFOs are predicting inflation will increase by 3.5 percent during 2000. This and other observations were made by financial officers in a survey conducted by the Financial Executives Institute and the Duke University School of Business.

The basis for this increase, up from 2.2 percent predicted at the beginning of the year, is the rising cost for oil. As oil prices continue to increase, the thinking is that companies will increase the cost of their own products to compensate for the additional energy costs.

Another inflationary factor is health care, which is expected to continue increasing at a mean rate of eight percent.

In other areas, the survey revealed that security still is a hot topic among companies, even though only 13 percent reported their own company had experienced a security breach. A more alarming statistic is the 30 percent of high-tech firms affected by some mishap in electronic security.

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