CFO Talk Increased Spending in New Survey

The fourth quarter "CFO Outlook Survey" conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business, CFOs are showing signs of optimism for the future, but remain committed to learning from important lessons learned from the economic downturn and stay focused on cost containment and streamlining operations.

Following an eight quarter decline beginning in 2007, the CFO Optimism Index for the U.S. economy rose in the third quarter and continued that rise in the fourth, increasing from 54.20 in Q3 to 56.98 in Q4 2009. Similarly, CFOs' financial prospects for their own companies rose another three points to 67.09 over Q3's 64.10. Despite an improved overall outlook, U.S. economic growth remains at the top of list of CFOs' concerns:

(38% rank as their number one economic worry for 2010),
(26%) cite consumer spending/demand as their top concern.
(25%) say competition is one of biggest challenges they face followed by expense control 23%


"The findings of our Q4 survey demonstrate that CFOs overall closed 2009 with a much improved sense of optimism that when it began, but they are realistic about the challenges that still lay ahead," said John Elliott, Dean of the Zicklin School of Business at Baruch College. "CFOs are indicating that they have learned lessons from the downturn and can face the coming year looking forward to the opportunities at hand."


The study revealed areas of increased spending by CFOs including Capital Spending(8.9%), Technology (6.1%), Inventory and limited hiring- 2.9%. When CFOs were asked this quarter to identify areas for increases in 2010, marketing and advertising and business acquisitions were also top of mind, with 39 percent of CFOs planning to increase marketing and advertising and 33 percent of CFOs planning increases in business acquisitions.

"The return to a place where CFOs are anticipating increased earnings and revenue provides encouragement that those companies that have endured the downturn are ready to come back strong," said Marie Hollein, CEO and President, Financial Executives International. "As far as the new normal is concerned, efficiency is the name of the game." When asked what their organizations would continue to do as they begin to emerge from the recession, nearly nine out of ten CFOs reported that they would continue process efficiencies put into place during the downturn. Two-thirds (66%) said they will continue technological efficiencies, and one-third (34%) plan to continue the restructuring of their business.

Full survey results and historical data comparisons are available at www.cfosurveys.com or from Nicole Madison at Nicole.Madison@fd.com. The study is also available online at the Financial Executives Research Foundation bookstore and on the Baruch College home page at www.baruch.cuny.edu.