For the first time since 2006, more than 50 percent of CFOs believe the US economy will show signs of improvement over a six-month span rather than remain the same or worsen, according to a new study from Chicago-based accounting firm Grant Thornton LLP.
Of the more than 1,000 CFOs and other senior financial executives who responded to Grant Thornton’s 2014 Spring CFO Survey, 51 percent think the economy will rebound before year’s end, while 42 percent said the economy will stay as is. Seven percent believe the economy will worsen.
This marks a dramatic change over the past two years, as only 25 percent thought the economy would improve or significantly improve in summer 2012. Optimism rebounded to 45 percent in Grant Thornton’s spring 2013 survey, but dropped to 40 percent in the firm’s fall 2013 study.
The results of Grant Thornton’s spring 2014 report are comparable to a recent survey from the American Institute of CPAs (AICPA), which found that for the first time since before the recession, the number of CPAs and financial executives optimistic about the economy had eclipsed the 50 percent mark.
“While optimism slipped a bit in the fall – likely due to gridlock in Washington at the time – the results of our spring survey and recent improvements in key economic indicators seem to signal that the slow increase in confidence in the US economy might be back on track,” Grant Thornton CEO Stephen Chipman said in a written statement. “However, in order for businesses to feel confident in long-term growth, hiring, and investment, our country’s leaders must pave a path to progress and a sustained economic recovery by ensuring stability in fiscal, public, and tax policies.”
The number of CFOs who believe the pricing or fees charged by their industry will improve or significantly improve rose from 37 percent in fall 2013 to 41 percent in spring 2014. For manufacturing executives, this number increased to 44 percent, up from 39 percent in the fall.
When it comes to hiring, 46 percent of CFOs surveyed said their company’s headcount will increase or significantly increase during the next year, up from 40 percent in spring 2013. In addition, 68 percent of finance leaders expect the average cost of an employee’s salary to increase during the next 12 months, showing no change from the fall, but up from 65 percent a year ago.
About the survey:
Grant Thornton conducts its CFO Survey twice a year with CFOs and other senior financial executives across the United States. The spring 2014 survey took place between May 13 and June 4, with 1,038 CFOs and controllers participating. The survey has a confidence interval of +/- 3.04 percent at a 95 percent confidence level.