A recent survey by Bank of America Merrill Lynch revealed that corporate financial executives’ outlook on the economy has improved substantially from last year.
Executives who participated in the CFO survey gave the U.S. economy an average score of 58 out of 100, compared to 49 last year. Executives gave the global economy a score of 51 out of 100, up from 45 last year.
Fifty-five percent of CFOs expect the economy to expand this year, compared to 39 percent, and only 10 percent said they expect the economy to shrink, down from 24 percent.
Additionally, 76 percent of executives said they conduct business in foreign markets—up from 73 percent in the previous survey and 67 percent one year ago.
“Beyond their brighter view of the economy, CFOs and their companies remain focused on new markets and opportunities for international growth,” Alastair Borthwick, the head of global commercial banking at BofA Merrill Lynch, said. “While expanding into other countries is attractive, doing business globally brings many challenges and often requires a wide range of financial solutions. More than ever, U.S. companies are seeking help with accessing capital, managing risk, maximizing cash and increasing efficiency as they grow their businesses.”
Executives cited healthcare costs—at 72 percent—as a significant concern for the U.S. economy, up from 62 percent in the previous survey and 51 percent one year ago. CFOs also cited healthcare costs as a significant concern for their own companies, with 70 percent indicating that it is a significant concern.
In terms of revenues and profits, 56 percent of financial executives expect revenue growth, while 43 percent expect an increase in profit margin. Forty-eight percent of CFOs expect their companies to hire this year, compared to 45 percent in the previous survey.