Business Outlook Survey: Bottom Dwellers
As they continue to seek the bottom of this economic crisis, CFOs now are expecting to find it further and further in the future. Sixty-seven percent of respondents to this quarter's Duke University/CFO Magazine Global Business Outlook Survey are less optimistic about the economy than they were last quarter, when finance chiefs already were feeling quite dismal. Just 35 percent now expect the economy to begin a recovery this year, with a third of them looking to the first half of 2010 for those receding "better days." A final third say recovery will not begin until the second half of next year or later.
The survey, conducted in late February among 1,268 respondents around the world, finds CFOs planning to cut costs every way they know how in the coming months. U.S. companies will pare capital spending by 13 percent on average over the next 12 months, while advertising and marketing budgets shrink by 8 percent, and tech spending slides more than 5 percent.
Sixty percent of companies already have made layoffs in the past year, and more are on the way. More than half the respondents plan a workforce reduction in the next 12 months. Those anticipated layoffs — expected to average about 6 percent of companies' work forces — represent some 7.6 million jobs, according to Campbell Harvey, international professor of finance at Duke's Fuqua School of Business, and the founder of the survey. Finance employees will feel slightly less impact than their colleagues in other departments; CFOs predict a 4-percent reduction in accounting and finance staff.
