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(Download the latest Business Outlook Survey results here)

The pessimism of the third quarter is giving way to a measure of optimism, finds the CFO Innovation Business Outlook Survey for the fourth quarter.

After the precipitous fall in optimism in the previous survey, the region’s CFOs, financial directors, controllers and other senior executives are beginning to turn more positive about the growth prospect of the economy where they are based.

Half of respondents say they are more optimistic or very optimistic about their own company’s growth prospects. In the previous quarter, 49% said the same. However, this expectation is not as strong as in the beginning of the year, when 67% of respondents said they were more optimistic or very optimistic.

A higher proportion of respondents anticipate higher sales and profits. Nearly seven out of ten (68%) of the executives surveyed say that sales at their company will rise in the next 12 months, compared with 63% in the previous survey. The majority (57%) project higher earnings (previous survey: 56%).

Capital and other spending are also on the rise. Nearly half (49%) of the businesses surveyed will increase capital spending in the next 12 months, up from 40% in the previous survey. Forty-five percent will increase spending in marketing and advertising (previous survey: 37%).

Companies are hiring as well. Half of respondents expect higher employee numbers in the next 12 months (previous survey: 45%). Sixty nine percent expect wages and salaries to rise, higher than the 64% who held the same view previously.

Going forward, companies will continue to focus on expanding in new markets and strengthening sales, marketing and distribution. A large majority (72%) rank expansion into new consumers segments and/or geographical markets as a top three strategic priority. Fifty five percent will focus on sales, marketing and distribution, while 44% will strengthen managerial and operational capabilities for the post-crisis world.

As in the previous survey, cost reduction has now fallen down the list of priorities, though still a major focus (39% will reduce direct costs; 37% will reduce overhead costs).

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