Chief financial officers across the world are growing more pessimistic about the U.S. economy, but still plan to increase capital spending and hiring this year, according to the June 2006 Duke University/CFO Magazine Business Outlook survey released Wednesday.
The survey showed only 24 percent of CFOs are more optimistic about the U.S. economy, in contrast with 42 percent last quarter. Around 49 percent are more optimistic about their own companies.
Optimism among Asian firms slipped from 67 percent last quarter to 54 percent this quarter. Asian CFOs said the prices of their own products will increase by 4.6 percent in the coming year, and expect double-digit increases in earning, capital spending and technology spending.
Rising wages, falling consumer demand, and increased fuel costs top CFOs' lists of concerns. CFOs said their bottom lines will suffer if core inflation rises to 3.5 percent, the Federal Funds rate goes above 5.5 percent, or if the price of crude oil surpasses 75 U.S. dollars per barrel.
Meanwhile, 40 percent of European CFOs are more optimistic about their own countries' economies, and 53 percent are more optimistic about the outlook for their own firms. However, the Europeans acknowledge that their current optimism should be viewed against the backdrop of Europe's recent weak economic history.
The survey collected responses from 980 CFOs, including 584 from the United States, 215 from Asia and 181 from Europe.