CORPORATE EXECUTIVES EXPECT CONTINUED SLUGGISH GROWTH

The results from this morning’s Business Roundtable survey of CEO’s showed a bit of a mixed bag with improvements in sales, declines in expected hiring and a generally sluggish environment:

The results of Business Roundtable’s fourth quarter CEO Economic Outlook Survey show a continuation of third quarter expectation trends for sales, capital spending and hiring.

“The findings of this survey reflect the continuation of a slow, uneven recovery characterized by ongoing economic uncertainty for American businesses,” said Jim McNerney, Chairman of Business Roundtable and Chairman, President and CEO of The Boeing Company.

Survey Results

The survey’s key findings from this quarter and the third quarter of 2011 include: 

Bank of America’s recent survey of CFO’s confirmed the outlook from the Business Roundtable citing the weakest survey results in the 14 year history of the B of A survey:

“Financial chiefs at U.S. companies are less optimistic about economic growth in 2012 than in previous years, however, the majority don’t expect work force reductions next year, according to a recent chief financial officer outlook survey by Bank Of AmericaCorp.

According to the annual latest survey of 600 executives by Bank Of America Merrill Lynch, 38% of respondents said they expect the U.S. economy to grow in 2012, down from 56% a year ago and 66% the prior year.

CFOs rated the economy a score of 44 out of 100 — its lowest score in the survey’s 14-year history. A year ago, CFOs gave the economy a score of 47.”

Sources: Business Roundtable, WSJ

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Larry

    “CFOs rated the economy a score of 44 out of 100 — its lowest score in the survey’s 14-year history. A year ago, CFOs gave the economy a score of 47.”

    IMO, CFO’s tend to be more honest and more realistic than CEO’s. So if the US economy is being rated at the lowest in 14 years by the CFO’s, then we are in for a rough year in 2012.

  • JJTV

    As an underwriter at an S&P 300 company I can see why CFO’s are becoming more cautionary. I review small companies (2 individuals) up to mega corporations and the vast bulk have smaller employment numbers than last year. The increase in bottom line profits due to cost cutting measures are beginning to wear off. This would leave you with consumption and price increases as your main drivers of revenue growth. We have the ability (insurance) to go with price increases but goods producing firms are left with mostly consumption change. Employment has not improved in my opinion as the labor force participation has receded in stride. This creates a bleak picture going forward. I also believe the increase in stock buy backs over the last few years is a marker for a lack of productive investment opportunities. Our company, instead of expanding operations, chose to do massive stock buy backs. This is becoming the norm rather than an occasional thing companies do. Even our firm, a highly profitable one, is not replacing workers who leave for other opportunities. There is an expectation that units will simply work longer hours. I have a hard time believing recovery is around the corner when firms are not putting excess cash to work.

  • Trixie

    Cullen, let’s make a deal: The next time you use an acronym and attempt to include or omit an apostrophe? Just do the OPPOSITE.

    I mean, really.

  • http://www.pragcap.com Cullen Roche

    Let’s make a deal – start giving me advice when I hire you back. Until then, remember that you were fired.

  • Trixie

    I just made a PragCapAbuse Twitter Account to keep you in line. Only problem is that I can’t figure out how to actually tweet. You’re off-the-hook…for now.

    “I could have gotten away with it, if it weren’t for those meddlin’ kids”.