Finance executives continue to be optimistic about economic growth over the next 12 months, with a majority of finance executives planning to hire more employees over the same time period, along with making greater investments in expanded operating capacity, research and development, and mergers and acquisitions, according to the fifth annual American Express/CFO Research Global Business & Spending Monitor, a survey of 541 senior finance executives from the United States, Europe, Canada, Latin America, Asia and Australia.
According to the survey, 64 percent of chief financial officers (CFOs) voiced expectations for modest-to-substantial expansion over the next 12 months, but thats lower than in 2011 and 2010, when 75 percent and 71 percent of all respondents anticipated economic expansion, respectively. Almost half (46 percent) of those surveyed said they expect robust growth to return to their countries by the end of the year, led by Hong Kong, Mexico and Germany. Respondents in the United States took a slightly longer view of the situation, with 75 percent of finance executives predicting growth after the end of the year.
Finance executives are looking for ways to stimulate growth, in part by deploying some of the cash that has built up on corporate balance sheets in recent years, Janey Whiteside, senior vice president of global corporate payments at American Express said in a statement. Finance executives also report theyll be keeping a sharp eye on the bottom line, while spending selectively on activities that will drive revenue like sales and marketing and new product development.
In the United States, the hiring picture was more positive compared with other participating countries, with 56 percent of respondents planning to add jobs and just 22 percent planning to cut positions. Overall, a majority of finance executives worldwide (53 percent) said they plan to increase headcount over the next 12 months. Fewer than 30 percent plan to reduce jobs, according to survey results. The top priority for companies that are hiring is the acquisition of specialized skills, expertise or experience (53 percent), the survey found. That placed well ahead of adding jobs in order to expand production capacity (20 percent) or restoring capabilities that were reduced in recent years (17 percent).
Although businesses have been amassing large cash reserves as a buffer against the economic uncertainty of the past few years, a majority of respondents (58 percent) said they would be focusing closely on investments that will support long-term growth, such as market access through increased sales and marketing activities (50 percent) and investing more in new product or service development (46 percent).
Expenditures such as travel, while not bearing the brunt of a resource shift, are nevertheless beholden to it. A majority of respondents (58 percent) said they would spend the same or more on business travel over the next 12 months, down from 2011, when 64 percent of respondents planned to spend the same or more over the same period of time.
Frequently, business travel is a key factor that enables companies to win on a national and global scale, Whiteside said. Our research suggests that when companies see a positive return on investment from travel, they will continue to spend on it."