Corporate treasurers and CFOs believe business conditions will improve in 2014 and that the U.S. economy will grow by 2.1 percent and will create another 1.95 million nonfarm jobs, according to a survey of 824 executives released by the Association for Financial Professionals (AFP).
The AFP Business Outlook Survey, which has tracked business predictions of CFOs, corporate treasurers and other financial executives for the last ten years, found that 52 percent of finance executives anticipate improved business conditions in 2014, with growth concentrated in the second half of the year. This is the largest percentage predicting improvement since before the recession of 2008-2009. Among optimistic respondents, 11 percent see GDP growth over three percent in 2014.
The survey found consensus around a bumpy start to the year, with only 29 percent of finance executives expecting improvement in the first two quarters.
Even if the economy grows modestly, more than three in five corporate practitioners expect revenue growth at their companies, with 57 percent expecting somewhat more revenue in 2014 and five percent expecting significantly more.
"With corporate revenue growth, the jobs will follow,” said Jim Kaitz, AFP's president and CEO. “Companies have pent-up demand for positions that had been put on hold in the last few years.” The survey showed that finance executives now expect their companies to begin hiring, both in U.S. and in their operations outside the U.S., with 43 percent anticipating expanding U.S. payrolls. Among those with employees outside the U.S., 41 percent plan on further expanding non-U.S. payrolls.
Yet, they see only modest inflation, predicting a CPI growth rate of only +1.3 percent. Half the responding companies said they had taken some type of action to take advantage of historically low interest rates, such as refinancing long-term debt or issuing new debt. And while finance executives do not anticipate a significant change in their company’s near-term borrowing costs, 47 percent say that they plan to take advantage of low rates before any potential interest rate hike.